As the first multiple-business charge card, Diners Club revolutionized the American economy and consumer culture by creating a means of effecting cash-free transactions and permitting consumers ready access to credit.

The use of charge cards began during the 1920’s, when department stores and gasoline retailers began issuing cards to their customers. By the 1930’s, some companies had begun accepting cards from other businesses on a limited basis. Until the establishment of Diners Club in 1950, however, no system existed by which a single charge card could be used at multiple businesses.Diners Club

The event that led to the founding of Diners Club reportedly occurred in 1949, when Frank X. McNamara, Frank X.McNamara was unable to pay for his dinner at a New York restaurant because he had forgotten his wallet. He subsequently resolved to devise a system by which consumers could pay for goods and services without cash by presenting a charge card that would allow member merchants to secure reimbursement from a central source. By 1950, McNamara and his partner, Ralph Schneider, had established Diners Club, enrolling the restaurant at which McNamara conceived the idea as one of its first member merchants and adding over twenty thousand cardholders to its rolls in its first year of operation.

By the mid-1950’s, Diners Club had enrolled thousands of member merchants and issued over 200,000 cards worldwide. The cards were promoted to salespeople and other frequent business travelers as a means of paying for and keeping track of expenses. After the Internal Revenue Service issued regulations requiring detailed accounting of business expenses in 1958, the number of Diners Club accounts being opened per year increased drastically. The card became a fixture of American culture, gaining prominence as a status symbol and as a representation of a modern consumer society characterized by mobility, affluence, and convenience.

Diners Club and early competitors such as American Express, which issued the first general-purpose charge card, required users to pay their outstanding balances in full within thirty to sixty days, and they were known among industry insiders as “travel and entertainment cards.” They were charge cards used primarily by business travelers and wealthy consumers as a convenient substitute for cash. In 1958, Bank of America issued the BankAmericard, a true credit card, which allowed customers to carry balances over time in exchange for interest charged to the balances. Credit cards linked to revolving-charge accounts became the industry standard during the late twentieth century. As credit cards became more widely available to consumers, nonrevolving charge cards such as Diners Club gained an increasing reputation for exclusivity while losing market share to an increasing number of revolving-charge credit cards.

During the early 1960’s, Diners Club became the first credit card company to sell franchise rights to its brand name, increasing its presence in international markets. By the early 1970’s, credit card companies such as BankAmericard (later Visa), MasterCharge (later MasterCard), and American Express had surpassed Diners Club in popularity. In 1981, Citigroup purchased the rights to the Diners Club name, and in 2008, Discover purchased the Diners Club network from Citigroup. Diners Club cards remained in limited use, primarily outside the United States.

• Evans, David S., and Richard Schmalensee. Paying with Plastic: The Digital Revolution in Buying and Borrowing. 2d ed. Cambridge, Mass.: MIT Press, 2005.
• Mandell, Lewis. Credit Card Industry: A History. New York: Macmillan, 1990.

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