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Credit cards have become a central part of consumer finance in the U.S; as of 2025, around 90% of American consumers have at least one credit card, with an average of 3.7 active cards per person. [1] Experian, “What is the Average Number of Credit Cards?” https://www.experian.com/blogs/ask-experian/average-number-of-credit-cards-a-person-has/
In this article, we’ll explore the history of credit cards in the U.S., from the first iterations to the modern credit cards many of us use today.
Late 1800s
Charge coins
1920s
Charga-Plates
1950
The Diners Club Card
1958
BankAmericard
Early 1960s
Magnetic stripe technology
1968
Truth in Lending Act was introduced
1976
BankAmericard rebrands as Visa
1988
Fair Credit and Charge Card Disclosure Act introduced
1994
EMV Chips
2004
Contactless cards are used in the U.S. for the first time
2009
The Credit CARD Act was introduced
2010s
Mobile wallets like Google Pay and Apple Pay
One of the very first forms of credit was charge coins, first issued in 1890. These coins were issued by stores to allow certain customers to make multiple purchases on a tab and pay them off later. The coins were unique to each customer and bore a customer number.
When making a purchase, the salesperson would check that the customer’s name matched the number on the coin before the customer could receive their purchase. [2] Credit Collectibles, “The Evolution of Charge Coins to Credit Cards” https://www.creditcollectibles.com/evolution-of-charge-coins-to-credit-cards/
In 1928, the Charga-Plate was introduced as a method for customers to make payments on their accounts at a specific store. These plates resembled military dog tags, with the front containing the owner’s name, address, and account number. Metal plates like these were used until the 1950s, allowing customers to purchase goods from a specific store and pay for them later. [2] Credit Collectibles, “The Evolution of Charge Coins to Credit Cards” https://www.creditcollectibles.com/evolution-of-charge-coins-to-credit-cards/ [3] American History, “Plastic Payments” https://americanhistory.si.edu/explore/exhibitions/value-money/online/innovations-money/plastic-payments
Frank McNamara launched the world’s first widely recognized multipurpose charge card after he forgot his wallet at a restaurant in New York in 1949. Frank and his lawyer returned to the same restaurant in February 1950 and paid their bill using a cardboard prototype card, now known as the Diners Club Card.
The card was initially designed as a charge card for New York’s business elite and grew to 10,000 members in its first year, and 28 restaurants and two hotels agreed to accept monthly billing for select clientele through these cards.
In the 1960s, the cardboard Diners Club Card turned plastic, and in the 1970s, the company introduced its first range of corporate cards. [4] Diners Club US, “Company History of Diners Club” https://www.dinersclubus.com/home/about/dinersclub/story
Bank of America launched the BankAmericard in 1958 as the first general-purpose credit card. This meant that the card could be used across different retailers and purposes, unlike previous iterations that were linked to particular retailers, or the Diners Club Card, which was mostly used in restaurants.
The BankAmericard was also the first card to offer revolving credit, meaning the user could pay it down in installments rather than pay the entire balance at the end of the month.
Bank of America started licensing the card to other banks, and BankAmericard eventually spun off into its own company in 1970. Later, in 1976, the BankAmericard was officially rebranded as the Visa Card. [5] American History, “First & Merchants Bank Americard Visa” https://americanhistory.si.edu/collections/object/nmah_1444151 [6] Federal Reserve History, “Electronic Point of Sale Payments” https://www.federalreservehistory.org/essays/electronic-point-of-sale-payments
The magnetic stripe is a technology most of us carry on credit cards, loyalty cards, and driver’s licenses. This thin strip of magnetic material contains information that can be accessed when it is swiped through a reader.
Magnetic stripes were developed by engineer Forrest Parry from IBM; he wanted to develop a magnetic strip of tape to attach to CIA identity cards to make them more secure. By 1969, the mag stripe technology had been adopted as a U.S. standard and, two years later, as an international standard. Combined with point-of-sale devices, computers, and data networks, the magnetic stripe sparked what would soon become the global credit card industry. [7] IBM, “The Magnetic Stripe” https://www.ibm.com/history/magnetic-stripe
With credit card use becoming more popular among American consumers, the government introduced the Truth in Lending Act (TILA) in 1968. This required creditors to disclose standardized information and offered additional consumer protections for a number of financing products.
TILA was enacted as part of the Consumer Credit Protection Act. It applies to “open-end credit”, such as credit cards, with repeat transactions and unspecified end dates for repayment, and “closed-end credit” with set terms and repayment structures, like auto loans.
Under TILA, creditors must include disclosures at origination, periodic statements, and application disclosures for some products. The specific disclosure requirements may vary depending on the type of credit. [8] Congress, “Overview of the Truth in Lending Act” https://www.congress.gov/crs-product/IF12769
The Fair Credit Billing Act of 1974 gave consumers the right to dispute billing errors and requires prompt written acknowledgment of consumer billing complaints. It also requires creditors to investigate billing errors and prohibits them from taking any action that adversely affects the consumer’s credit until the investigation is complete. [9] FTC, “Fair Credit Billing Act” https://www.ftc.gov/legal-library/browse/statutes/fair-credit-billing-act
Introduced in 1988, the Fair Credit and Charge Card Disclosure Act brought in new requirements for creditors to disclose information related to charge card and credit card account applications and solicitations. This included separate disclosure requirements for credit card applications and solicitations by mail, telephone, and other means.
This amendment requires credit card solicitors to disclose, among other things, information about annual percentage rates, annual and other fees, minimum finance charges, grace periods, and balance calculation methods. [10] Congress, “Fair Credit and Charge Card Disclosure Act of 1988” https://www.congress.gov/bill/100th-congress/house-bill/515
EMV, which stands for Europay, Mastercard, and Visa, is a type of chip developed by these three credit card companies to make credit card payments more secure.
The first version of EMV chip cards came out in 1994. They use encryption and tokenization to add layers of security to payment cards. Encryption scrambles your data in transit, and tokenization generates a virtual token that allows merchants to collect your data without sharing your actual credit card details. [11] Credit One Bank, “How Does an EMV Chip Card Protect You?” https://www.creditonebank.com/articles/see-how-an-emv-chip-card-protects-you
The world’s first contactless payment card, the UPass, was launched in Korea by the Seoul Bus Transport Association, allowing commuters to pay for their journeys with contactless technology, and this went on to spark the introduction of contactless payments around the world. [12] Global Payments Integrated, “The History of Contactless Payments” https://www.globalpaymentsintegrated.com/en-us/blog/2020/09/15/the-history-of-contactless-payments
Contactless payment cards were first used in the U.S. in 2004, and in 2008, Visa, Mastercard, and American Express began offering contactless credit cards. [12] Global Payments Integrated, “The History of Contactless Payments” https://www.globalpaymentsintegrated.com/en-us/blog/2020/09/15/the-history-of-contactless-payments
Congress passed the CARD Act in 2009 as a way to “establish fair and transparent practices related to the extension of credit”. The Act contains a range of consumer protections, many of which relate to interest rates, disclosures, fees, and marketing to young adults.
Some of the key protections include:
In 2011, Google WalletTM and Android PayTM were launched, giving consumers the option to make contactless debit and credit card payments using their smartphones instead of physical cards. A few years later, in 2014, Apple Pay® was launched for iPhone users. [12] Global Payments Integrated, “The History of Contactless Payments” https://www.globalpaymentsintegrated.com/en-us/blog/2020/09/15/the-history-of-contactless-payments
These mobile payment methods are powered by Near Field Communication (NFC), which was first introduced in the early 2000s, and is the same technology used in contactless cards.
NFC is a type of radio-frequency identification (RFID) that allows us to identify things through radio waves. When a payment is initiated through a smartphone wallet like Google WalletTM or Apple Pay® , the customer’s phone must be within two inches of the point-of-sale system to complete the payment. Information is transmitted via radio frequency to process the payment within a few seconds. [14] Square Up, “What is NFC? A Complete Guide to Near Field Communication” https://squareup.com/us/en/the-bottom-line/managing-your-finances/nfc
Advances in artificial intelligence (AI) and technology are beginning to shape how consumers interact with credit card products. The CFPB's 2025 Consumer Credit Card Market Report identifies several developments that could influence the market going forward.
On the consumer side, AI-powered tools are being used to help cardholders manage debt, including assistance with structuring repayment plans. Issuers are also drawing on alternative data sources, such as bank account cash flow data, to extend credit card access to consumers with limited credit histories.
However, the same technology is also being used to facilitate fraud, with the CFPB noting that AI is increasing both the frequency and severity of payments-related fraud. Beyond AI, the report identifies alternative payment methods, including stablecoins and pay-by-bank, as emerging developments that could affect how credit cards compete in the broader payments market. [15] Consumer Finance, “The Consumer Credit Card Market Report” https://files.consumerfinance.gov/f/documents/cfpb_consumer-credit-card-market-report_2025.pdf
Written on June 16, 2026
Self is a venture-backed startup that helps people build credit and savings.
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