From Forgotten Wallets to Wallet Must-Haves: The Journey of How Credit Cards Became Popular

You’re swiping plastic to pay for lunch without thinking twice. But there was a time when this convenience didn’t exist. Today, credit cards are so embedded in American culture that over a billion cards circulate through the country. So when did credit cards become popular, and how did we get here?

The Rocky Start: Why Nobody Wanted Credit Cards at First

Before credit cards conquered the market, buying on credit was handled the old-fashioned way. In rural communities during the late 1800s and early 1900s, general store owners kept open books tracking who owed them money. Cities followed suit, but the process was clunky.

Stores started issuing charge coins with account numbers, then upgraded to cardboard charge cards. The real innovation came in 1928 with the Charga-Plate—a metal card that actually printed your name on it. But here’s the catch: each card only worked at one store. If you wanted to buy on credit, you’d need a stack of cards from different merchants.

The Turning Point: When One Card Ruled Them All

Everything changed in 1950. Frank McNamara, the legend goes, forgot his wallet at dinner. That awkward moment sparked an idea: what if you had one card that worked everywhere?

McNamara launched Diners Club International with partners Ralph Schneider and Alfred Bloomingdale. The Diners Club card could be used across 27 restaurants—revolutionary at the time. It wasn’t perfect, though. You had to pay the full bill monthly with a 7% interest charge and $3 annual fee. Still, people wanted it.

Ironically, McNamara thought this was just a fad. He sold his stake to Schneider and Bloomingdale for $200,000 and watched from the sidelines as Bloomingdale made history. Bloomingdale confidently predicted credit cards would eventually “make money obsolete.”

Bank of America’s Masterstroke: The Move That Made Credit Cards Popular

When did credit cards become popular for real? 1958. Bank of America released the BankAmericard® in Fresno, California, and changed everything.

Other banks had tried launching credit cards before but hit a wall: nobody wanted a card stores didn’t accept, and stores had no reason to accept a card with few users. Classic chicken-and-egg problem.

Bank of America solved it brilliantly. They identified that 45% of Fresno residents banked with them and mailed credit cards to all 60,000 simultaneously. Suddenly, merchants had a huge customer base ready to use the card. They accepted it. More people signed up. Momentum built.

The BankAmericard® offered something Diners Club didn’t: revolving credit. You didn’t have to pay your full balance monthly. The card spread through licensing agreements with other banks until eventually becoming Visa in 1976.

How Credit Cards Went Mainstream

The competition didn’t take long to emerge. Master Charge launched in 1966, later rebranding as Mastercard, to challenge Bank of America’s dominance.

But when did credit cards become popular among everyday consumers? The 1980s. Interest rates dropped, spending surged, and credit card rewards exploded onto the scene. Airlines tied cards to frequent flyer programs first. Then Discover introduced cash back, and suddenly people realized you could earn money by spending money.

From there, it was unstoppable. Credit cards transformed from a niche payment tool into the dominant payment method in America. Today, with thousands in potential travel rewards or cash back available, using the right card is almost an investment strategy.

The journey from McNamara’s forgotten wallet to today’s rewards-loaded cards shows how innovation often comes from solving a personal problem—then realizing everyone has that same problem.