When were credit cards invented?

It might seem like credit cards have been around forever, but the first modern credit card wasn’t introduced until 1950. Since then, credit cards have gone through many evolutions and advancements to make them safer and more rewarding for consumers.  

What you’ll learn:

• The idea of credit has existed since ancient times, and the history of modern credit cards can be traced back to the credit coins and charge plates of the 1800s and early 1900s. 
• The Diners Club card was invented in 1950 and is known as the first modern-day credit card.
• As the credit card industry grew, new credit cards emerged, and credit card technology evolved to be safer and more convenient for consumers.

The concept of credit has likely existed for thousands of years. And as far back as the 1700s—centuries before the first credit card was invented—people have taken part in transactions that closely resemble how credit is used today. 

One example is merchants extending credit to farmers. Since there were several months between the planting and harvesting of crops, farmers would often receive seeds from merchants by promising to pay the merchant back after harvesting the crops. 

Here’s a closer look at the more recent history of credit and what led to credit cards as we know them today:

The exchange of goods for credit prompted the invention of credit coins and charge plates that consumers could use with merchants like department stores and hotels. The idea was similar to what we have today, where you may have a store credit card that can only be used at that retailer.

In the early 20th century, Western Union® started giving select customers metal plates that gave them the option to charge now and pay later. Other companies soon followed suit.

In 1946, John Biggins, a Brooklyn banker, came up with the idea of the Charg-It card to bring new customers into the bank. People with an account at the bank could use their card at a few select local merchants. The merchant would then send the receipts to the bank, and the bank would pay for the items purchased and later bill the customer for repayment.

Invented in 1950, the Diners Club card is known as the first modern-day credit card. The idea came from Frank McNamara, a businessman who’d forgotten his wallet while out to dinner in New York. He and his business partner, Ralph Schneider, would soon be known as the inventors of the credit card. They created the Diners Club card as a way to pay without carrying cash.

The Diners Club card was first used only in local restaurants before expanding to include additional retailers. The new charge card required customers to pay the balance in full at the end of every month.

By 1951, the Diners Club boasted 42,000 members and had expanded to major U.S. cities. By 1953, it was accepted in Canada, Cuba, Mexico and the United Kingdom.

In 1958, American Express, which had made its name by transporting customers’ valuables and offering traveler’s checks, introduced its first charge card. That same year, Bank of America® launched the BankAmericard, the first card to offer consumers revolving credit.

In 1966, American Express released their corporate card for commercial travelers. And in 1976, BankAmericard became Visa®—now a global corporation.

In 1966, a network of banks that accepted cards as payment formed the Interbank Card Association. Originally named Master Charge, by the 1970s it had become a global alliance called Mastercard International.

The Discover card was initially launched by Sears, Roebuck & Co. The first test purchase for the new Discover card was made on September 26, 1985, for $26.77. 

Testing for the card continued in Atlanta and San Diego until it launched publicly with its first television commercial during Super Bowl XX in 1986. Discover featured no annual fee and one of the first cash back rewards programs. In 2008, Discover acquired Diners Club International®. And in 2025, Capital One acquired Discover.

A lot has changed when it comes to credit cards, including stronger security, new payment technology and expanded consumer protections. Here’s a closer look at some of the ways credit cards have evolved over the years:

Before credit cards had a magnetic strip, cards were put on a machine, imprinted onto a charge slip and sent to a processing center where card information was put into a computer manually.

The magnetic strip was added in 1969 when an engineer from IBM developed it as a convenient way to process credit card information. It also added a layer of security that didn’t exist at the time. The magnetic strip soon became the standard, allowing the transmission of information around the world.

Card issuers introduced CVV codes to make it more difficult for fraudsters to use stolen credit card information. A CVV code is a three- or four-digit number that’s often found on the back of a credit card. It’s mainly used for transactions that don’t involve swiping or tapping the physical card, like purchases made online or over the phone.

As security became a growing concern, EMV chips were added to many credit cards to help further protect against fraud. EMV stands for Europay, Mastercard and Visa. The EMV chip generates a unique transaction code each time you use the card. This generally makes EMV chip transactions more secure than magnetic strip transactions, which don’t create a unique code.

Virtual card numbers are unique numbers that are linked to your credit card account but differ from your physical card’s number. They’re primarily used for online shopping and can help you protect your personal information and keep your account secure.

Contactless credit cards have become more and more popular in recent years. Digital wallets like Apple Pay® and Google Pay™ also use contactless payment technology. Tapping your card or mobile device on a contactless-enabled card reader is typically both faster and more secure than swiping your credit or debit card.

Early on, discriminatory practices were not uncommon in the credit card industry. Many companies wouldn’t provide credit cards to African Americans. And until 1974, women could only get a card with a male co-signer. Regulations didn’t exist before the 1970s, meaning there were no standards for calculating interest rates or protections for cardholders.

Several laws were passed over the years to help protect consumers and regulate the industry, including: 

• The Truth in Lending Act (TILA): First enacted in 1968, TILA requires lenders to disclose the terms and cost of consumer credit, including things like annual percentage rates and fees.
• The Fair Credit Reporting Act: Introduced in 1970, the Fair Credit Reporting Act requires credit card companies to report information to credit reporting agencies accurately. 
• The Equal Credit Opportunity Act: The Equal Credit Opportunity Act followed in 1974, making it illegal for credit card companies to discriminate based on race and gender. 
• The Fair Credit Billing Act: 1974 also saw the passing of the Fair Credit Billing Act, which lets consumers dispute unauthorized charges on their bills.
• The Credit Card Accountability Responsibility and Disclosure (CARD) Act: In response to credit card companies’ high fees and penalties charged to cardholders, additional legislation was introduced with the CARD Act of 2009. This law protects cardholders from deception by card issuers.

While some form of credit reporting predates the invention of credit cards, the two have become closely linked. The Mercantile Agency was founded in New York in 1841 as the first U.S. credit reporting agency. It collected information about borrowers and lenders across the U.S., but the results relied heavily on personal impressions and often led to discrimination. 

The modern credit score is a three-digit number that reflects a borrower’s creditworthiness based on information collected by the credit bureaus. The original concept of a credit score is credited to Fair, Isaac and Company, which today is known as FICO®. The FICO Score was introduced in 1989 and would go on to become the industry standard. In 2006, VantageScore® emerged as an alternative to the FICO scoring models.

In the 1980s, credit card companies started to introduce rewards programs. The Diners Club card established the first credit card rewards program, called Club Rewards, in 1984. Rewards cards like these expanded throughout the 1990s with co-branded deals and cash back offers. 

Today, consumers have a wide variety of rewards cards to choose from, including travel rewards cards, cash back rewards cards, and dining and entertainment rewards cards.

The first modern credit card—the Diners Club card—was invented in 1950, giving consumers a new way to pay without needing cash on hand. Over the years, credit cards evolved to have stronger security features, more consumer protections and better rewards programs. Today, credit cards are one of the world’s most popular payment methods.

If you’re ready to find the right credit card for you, see if you’ll be approved for a Capital One card with 100% certainty and no impact to your credit scores.