Introducing the modern credit card

Bank of America started the first nationally licensed credit card program, originally called BankAmericard. After rapid and widespread adoption and growth, the program expanded around the globe and was eventually renamed Visa.

With the American economy booming in the 1950s, consumer confidence was building. In late 1955, Bank of America pioneered the first large-scale computer application for the banking industry. The bank then built on this technology to support a new kind of credit card program to cater to society’s increased mobility and demand for greater convenience in purchasing power.

Credit cards weren't a new idea in the 1950s. Diners Club introduced its credit card in 1951 to 200 customers. The card allowed them to charge their meals at an initial 27 restaurants throughout the New York City area. American Express also launched its credit card, primarily designed for use in travel and entertainment. These cards were accepted by restaurants, hotels and airlines and proved to be a perfect complement to the company’s Traveler's Cheques product. With each of these early credit card programs, customers were required to pay the balance at the end of each month.

In 1958, Bank of America introduced a general-use credit card, the BankAmericard. Unique in the industry, it could be used for any type of purchase at participating merchants. Its use was not restricted to restaurants, hotels or entertainment. It eliminated the need for multiple cards that were designed for specific purchases like gas or restaurant meals. It was the first credit card program to offer revolving credit, allowing customers to pay down their balances over time. The card also established many of the standards for credit cards to follow, including a 25-day grace period, credit limits and floor limits. BankAmericard was first tested in Fresno, California with an initial 60,000 customers who received ready-to-use cards. The pilot program was a huge success and in 1959, the program was rolled out statewide in California.

By the end of 1960, almost a million BankAmericards were in circulation and nearly 30,000 merchants were accepting them for payment. In 1966, Bank of America began licensing the card to banks across the country, creating the first nationally licensed general-use credit card program. By June of that year, 61,000 merchants accepted the cards and 1,765,000 customers were using them. By 1968, BankAmericard was accepted in 42 states with 41 issuing banks and 1,823 associated banks. The card was also affiliated with banks in Canada, Great Britain, Ireland and Japan.

Based on the success of BankAmericard in California, other banks used the same strategy of sending out cards to customers. It worked so well that by 1970 more than 100 million credit cards were in circulation across the country. That same year, all issuing banks formed National BankAmericard Incorporated, as an interbank card association for marketing in the U.S. To reflect its international acceptance, BankAmericard changed its name to Visa in 1976. The name was chosen because it was a term recognized throughout many countries and across many languages to mean universal acceptance.

Today, credit cards are one of the most popular and desired items in people's wallets. In the past 50 years alone, millions of people have started using some sort of credit card to assist them with their financial needs.

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