After the first bank cards were issued in the mid 1940s, the next step in credit card evolution was undoubtedly the Diners Club Card, which was first used in 1950. According to a Diners Club historian, the story of the first credit card to be in widespread use began in 1949, when Frank McNamara went to New York’s “Major’s Cabin Grill” restaurant for a business dinner but forgot his wallet.
McNamara decided that there should be a way to make payment that was as universally accepted as cash, but less bulky, easier to carry around, and safer to use. He and his partner Ralph Schneider developed the Diners Club Card, and returned to Major's Cabin Grill in February of 1950 with the small cardboard card that would eventually become the first widely used credit card, decades before the credit card swipe machine was even imagined. By 1951, over 20 thousand people used the Diners Club Card for dinners out, travel expenses, and entertainment purchases.
The Diners Club Card was technically a charge card (rather than a true credit card) because, although purchases were made on credit, cardholders had to pay their Diners Club bill in full at the end of each month. The most famous charge card to date is of course the American Express card. The company was founded in 1850 as a competitor to the U.S. Postal Service, specializing in money orders and traveler’s checks for the first century it was in business. In 1946, American Express discussed creating a charge card, but abandoned the idea until 1958 when, driven largely by the competition from Diners Club, the company introduced its purple charge card, intended to be used for travel and entertainment.
A year later, the company took the next step toward modern day credit cards and credit card swipe machines by introducing the first card made of plastic. Previously, all cards were made of cardboard or celluloid.