Credit Card Association

How Credit Card Association Came To Be?

The history of credit card association is close to the beginnings of credit cards. It's interesting to know how these big companies came to be and influenced millions of private individuals, corporate leaders and businessmen on the massive use of a small plastic but very useful card. Here is a short story on how credit card association was formed.

Credit cards have been around since the year 1951 and today it is more useful than ever before. It all started with the customers of Franklin National Bank in New York City. During these times, the loan customers of the bank were given a card to determine that their loan application has already been approved. There was not even a single credit card association but merchants were already optimistic with the potential of the card. After the customers were given cards, they used it to buy goods in retail shops. To get the payment of the credit, the owners of the retail shop will then record the information of the customers and present it to the Franklin National Bank for crediting.

Seven years later, American Express created a similar system but this time, the company gave plastic cards to business travelers. The company was known being a provider of traveler business checks. The card was immediately recognized by many major airline companies, hotels and restaurants.

One year later, the Bank of America issued its own credit card called BankAmericard. But this was only serviced within the State of California. The BankAmericard is considered the original universal credit card that was accepted by most businesses. Because of the massive use of BankAmericard, Bank of America created license agreements with the banks and thus born the first credit card association in the year 1966.

1967 was the birth of MasterCharge program, the brainchild of 4 banks in California. These 4 banks became the Western States Bankcard Association. And in 1979, MasterCharge was changed to MasterCard. The second well known credit card association in that time. In 1976, BankAmericard was renamed to VISA. Each credit card association its own set of rules in credit card processing. Both have also become major competitors.

Although American Express was the first to charge a card, the company only allowed over time pay in 1987. There are currently six credit card associations in the United States today, the American Express, Discover, MasterCard, Visa, JCB and Diners Club. The face of credit cards has continued to evolve over the years. The system may have changed, but only one thing remained – that people tend to spend more on credit cards than cash.