The first Credit Card was created because of the embarrassment of a man who had to pay for dinner but forgot his wallet.
In 1949, Frank X McNamara, head of the Hamilton Credit Corporation, went out to eat with Alfred Bloomingdale, McNamara's long-time friend and grandson of the founder of the Bloomingdale's store, and Ralph Sneider, McNamara's attorney. The three men were eating at Major's Cabin Grill, a famous New York restaurant located next to the Empire State Building, to discuss a problem customer of the Hamilton Credit Corporation.
The problem was that one of McNamara's customers had borrowed some money but was unable to pay it back. This particular customer had gotten into trouble, when he had lent a number of his charge cards (available from individual department stores and gas stations) to his poor neighbours who needed items in an emergency.
For this service, the man required his neighbours to pay him back the cost of the original purchase plus some extra money. Unfortunately for the man, many of his neighbours were unable to pay him back within a short period of time and he was then forced to borrow money from the Hamilton Credit Corporation.
At the end of the meal with his two friends, McNamara reached into his pocket for his wallet so that he could pay for the meal (in cash). He was shocked to discover that he had forgotten his wallet. To his embarrassment, he then had to call his wife and have her bring him some money. McNamara vowed never to let this happen again.
Merging the two concepts from that dinner, the lending of credit cards and not having cash on hand to pay for the meal, McNamara came up with a new idea - a credit card that could be used at multiple locations.
The problem was that one of McNamara's customers had borrowed some money but was unable to pay it back. This particular customer had gotten into trouble, when he had lent a number of his charge cards (available from individual department stores and gas stations) to his poor neighbours who needed items in an emergency.
For this service, the man required his neighbours to pay him back the cost of the original purchase plus some extra money. Unfortunately for the man, many of his neighbours were unable to pay him back within a short period of time and he was then forced to borrow money from the Hamilton Credit Corporation.
At the end of the meal with his two friends, McNamara reached into his pocket for his wallet so that he could pay for the meal (in cash). He was shocked to discover that he had forgotten his wallet. To his embarrassment, he then had to call his wife and have her bring him some money. McNamara vowed never to let this happen again.
Merging the two concepts from that dinner, the lending of credit cards and not having cash on hand to pay for the meal, McNamara came up with a new idea - a credit card that could be used at multiple locations.
Source: about.com
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