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Conclusion
Other early entrants included Carte Blanche (originally the Hilton Hotels card, renamed in 1958) and various regional travel and entertainment cards. However, these cards remained limited in scope compared to what was to come.
III. The Advent of Bank-Issued Credit Cards and Revolving Credit
A. BankAmericard and the “Fresno Drop” (1958)
The next major leap in credit card history came from the banking sector. In September 1958, Bank of America launched the BankAmericard in Fresno, California, in what became known as the “Fresno Drop”. In a bold and risky move, the bank mailed 60,000 unsolicited active credit cards, each with a $300–$500 credit limit, to residents. Over 300 merchants had agreed to accept the card, which allowed cardholders to make purchases at multiple retailers and, crucially, to carry a balance from month to month—introducing the concept of “revolving credit” to the mass market.
The BankAmericard program faced significant challenges in its early years: high delinquency rates (over 20%), rampant fraud, and public skepticism. Many recipients were unfamiliar with credit repayment rules, and some merchants, especially large retailers with their own charge programs, were reluctant to accept the card due to the 6% merchant fee. Nevertheless, the convenience and flexibility of revolving credit proved attractive, especially to America’s growing middle class.
Despite initial losses (estimated at $20 million), Bank of America refined its processes, improved collections and fraud prevention, and began licensing the BankAmericard program to other banks nationwide. By 1966, BankAmericard had become the first general-purpose credit card available across the United States, and in 1976, it was rebranded as Visa, a name chosen for its global appeal.
B. The Rise of Interbank Networks: Mastercard and Beyond
In response to BankAmericard’s success, a consortium of California banks formed the Interbank Card Association (ICA) in 1966, launching the Interbank card (later Master Charge, and ultimately Mastercard in 1979). Unlike BankAmericard, which Bank of America initially dominated, the ICA was governed by consensus among member banks, each of which could issue cards and sign up merchants. The ICA quickly expanded internationally, forming alliances with banks in Mexico, Europe, and Japan.
Everything else is just history
Read the first part of this series, The Birth of the Modern Credit Card, here.
