The definition of a credit card:

“a plastic card allowing the holder to make purchases on credit.”

Oxford English Dictionary

The First Credit Card

The credit card concept was actually devised in America in 1950 by Frank McNamara, head of the Hamilton Credit Corporation. The brain wave came to McNamara during a lunch time meeting with Alfred Bloomingdale, founder of the Bloomingdale's store. McNamara realised that he didn’t have enough money on him to pay for lunch for them both. He found this frustrating as the only solution was to call his wife to bring some funds. He came up with the idea that the cost of lunch could be place onto credit and paid off at a later date.

This spawned the idea for the first credit card, the ‘Diners Card’. The two men pooled their money and started the new business. It was a complete success and within 1 year 20,000 people were using the Diners Card.

Though the Diners Club continued to grow and by the second year was making a profit ($60,000), McNamara thought the concept was just a fad. In 1952, he sold his shares in the company for more than $200,000 to his partners

The Diners Club credit card continued to grow more popular and didn't actually receive competition until 1958. In that year, both American Express and the Bank Americard (later called VISA) were set up and the modern age of credit cards started to develop.