The Diners Club

Today consumers take it for granted that they can go out, have a meal and pay for it with a credit card. That was not always the case even in the 20th century. The Diners Club card was the brainchild of Frank McNamara and its concept was simple. A customer could present their card at any restaurant that accepted the card and they would be billed for the meal later. McNamara was hosting a client and realized he left his wallet at home when he was given the check (there are a few different versions of the story). While he waited for his wife to go home to retrieve his wallet he discussed an idea he had with the owner of the restaurant, the Majors Cabin Grill on West 33rd Street in New York City (located about halfway up the block in the above picture). The following day McNamara and his attorney, Ralph Schneider, met and began to work out the details and raise capital. In February of 1950 they went forward and founded the Diners Club. There should be little surprise that the first recorded usage of the card was at the Majors Cabin Grill by McNamara, who used a cardboard card with his signature on it.

The card was originally expected to be used by a select few in only a few local restaurants as an exclusive club. The first cards were issued in 1950 but within a year there were 20,000 cards in circulation. Its usage even expanded into the retail market. Exclusive indeed! The card itself was not technically a credit card. At the end of the pay period the bill was due in full making it more of a charge card than a credit card but the idea was there.

McNamara sold his interest in the company in 1952 for $200,000 but the Diners Club continued on. In 1961 they introduced plastic charge cards to replace paper cards, by that time around one million of them. Competition took its toll as true credit cards entered the market and other diners club cards like Arthur Bloomingdale’s Dine and Sign card sprung up. Diners Club International was purchased by Citigroup in 1981 and later by Discover in 2008. It can now be found all over the world with franchises in many first world countries.

With the Diner’s Club card Americans were now becoming more and more comfortable with making purchases on credit. When true credit cards were introduced it made their acceptance come much easier. One has to wonder how long it would have taken the credit card industry to develop if McNamara had not left his wallet at home.