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The First Credit Card Ever (or The Day Cash Died)

Today there are more than 2 billion credit cards being used around the world. On February 9, 1950, there were three.

That afternoon, Frank McNamara, who conceived the idea of a credit card to be honored by restaurants, carried Diners Club card number 1000. His partner Ralph Schneider had 1001, and I, at the time their publicity man and very soon to be in charge of all sales and marketing, had 1002.

Card 1000 was first used when the three of us had lunch that day. The restaurant was Major’s Cabin Grill, which was adjacent to the Empire State Building where Schneider and McNamara had their offices. McNamara ran a small loan company, and Schneider, a Harvard Law School graduate, practiced law from that office. Major’s Cabin Grill no longer exists, but my memory of that day is vivid. The owners of the restaurant, Major Satz and his son, Buddy, stood some 20 feet from us watching after we finished lunch. McNamara pulled out his wallet and handed the first credit card ever printed to the waiter, who was puzzled but then suddenly remembered. He turned to the major, who nodded. The waiter walked off and came back with a triplicate sheet, which had a rectangular box with the price of the lunch and a space for a tip. There were two carbon sheets between three pages, so that when McNamara signed for lunch, the signature would appear on all three sheets. As though he had rehearsed for this — which he had — the waiter pulled out sheet number three and handed it to McNamara. The top copy was to be sent to the Diners Club, and the middle copy was kept by the restaurant. McNamara turned to Schneider and me and smiled.

I first met with McNamara and Schneider a few months earlier, when they had outlined their plan. McNamara had a “great idea” that involved owing money on dining charges — hence the name Diners Club. But it wasn’t being well received. Restaurant owners didn’t know who McNamara was. Since I was a press agent for many leading restaurants and nightclubs, I had been recommended as someone who could help.

The scheme was simple: McNamara and Schneider would issue charge cards to be used at New York–area establishments. Every month, they’d bill the user of the card for his charges during the previous 30 days. The cardholders would be charged nothing, the restaurant would receive 93 percent of the total, and Diners Club would get the rest.

The idea didn’t sound very good to me. I’d never charged for anything in my life; I paid cash for everything. I said I’d think about representing them, left the office, and simply forgot about it. But Schneider was insistent. We met for a drink and he went over all the good points of McNamara’s idea: You don’t have to carry a lot of cash. You get a receipt for your own bookkeeping. And perhaps most importantly, you have a receipt for a tax write-off if you take out a potential customer or client. [ … ]

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