The Story of Diners Club, the First Credit Card

Did you know that the Diners Club card was the first credit card? We are familiar with them today, but before 1950 they had not existed. Today we are used to reading and hearing about startup founders with ideas for new fintech that does this or that, usually providing a financial service that already exists, but doing it faster, cheaper, more easily. There’s an endless stream of fintech startups, hoping to carve out a corner of some aspect of financial services. However, the founders of Diners Club were true pioneers. They created an entire credit card ecosystem before any banks ever thought of it; presented a brand new concept to merchants with non-essential, and sometimes higher price items to sell; and convinced well-off consumers to adopt a totally new way of paying. And grew business through telling a simple story.

The start of Diners Club was supposedly based on a man taking a client to dinner, and through forgetting his wallet he was unable to pay. While company stories are meant to be authentic, it turns out this one owes more to poetic license, and was more of a PR Man’s masterstroke. Diners Club’s marketing efforts continued to use them to build a global brand and market leader status. This shows that storytelling, used by the major brands such as Diners Club as a marketing tool, is not new. Today’s digital channels just provide many more ways to circulate the stories.

The Diners Club myth

The man in question was a co-founder of Diner’s Club, Francis McNamara. The story is that one evening in 1949 he had forgotten his wallet and his wife had to drive it to the restaurant for him to pay the bill. He then supposedly came up with the idea of a charge card for use in restaurants to avoid having to pay by cash or check each time, and settle up a monthly bill. But let’s face it, if such a card had already existed, wouldn’t it have been in the same wallet as his cash? He would still have been unable to pay, but people remember a story like this more than the detail of relentless work and iterations to create a totally new financial service.

Narrative stories as part of brand marketing are a powerful way to breathe life into a brand and enhance its identity. Beyond facts and figures of competitive performance and product advantages, a good story can engage a target audience’s heart as well as its head, and thus connect at an emotional level.

The real origin of Diners Club

The “alternative” or “real history” of the first credit card was written about in 2020 by a friend of the PR man who created the myth, Matty Simmons, after he had passed away. Matty knew the real story, as he had handled the marketing to get the innovative financial startup off the ground: here it is.

Frank McNamara had lunch at the same restaurant every day he was at work in New York City. As a reliable, regular customer he was able to set up a personal tab to pay a monthly bill. But he would not be able to reach a similar arrangement with other restaurants, and other (unknown) people could not put their bills on a tab in the same restaurant that he went to all the time.

Store cards had existed for 20 years. However, each store issued its own card. The cards were made of metal with embossed details which were impressed on triplicate store bills, and payment was settled up on a monthly basis. Restaurant users would not want to have to carry numerous metal tags around for each place they might want to eat in, so store cards were a start point though not the final solution of what was to become the first credit card, the Diners Club card.

It was almost inevitable that Frank McNamara’s regular restaurant, The Major’s Cabin Grill at 33 West 33rd Street, would be the first one to take the first payment by a general-purpose charge card. That was in February 1950, and the charge card was made of cardboard.

For more, here is the link https://bold-awards.com/power-brand-diners-club/