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They thought there had to be a catch.”There was indeed a catch, but it snared the merchant, not the consumer.

Devising the system that card issuers use to this day, Diners Club (which is now a subsidiary of Citicorp) underwrote the cards mainly by charging retailers a “discount” of up to 10 percent on each sale; it repaid the merchant that much less than the amount of the sale.

For an annual fee of three dollars they had the means to charge meals at any of twenty-seven restaurants around the city.

By the end of 1951 more than a million dollars had been charged on the growing number of pressed-paper Diners Club cards, and the company was turning a profit and starting to pay off its ,000 debt.

By 1958 magazine could observe that “in the nation’s expense-account economy, nobody is anybody unless he can say, ‘Charge it.’” That same year, newspapers revealed that a Hollywood divorce settlement had spelled out who was to retain custody of the couple’s Diners Club card.

But would the rise of the credit card be a boon or a curse to the citizenry?

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He founded Diners Club in the spring of 1950—not long after that lunch—on just ,000 put up by his partner and attorney, Ralph Schneider.

Within a year about two hundred people had been persuaded to carry the world’s first multiuse charge card.

But nobody yet foresaw the makings of a multibillion-dollar international in dustry—least of all Mc Namara. He realized that many Americans were suspicious of the basic idea of credit, and he thought they would remain so.

As Lawrence Lockey, dean of the School of Commerce at the University of Southern California, wrote in 1954, “Deep in our cultural heritage is the feeling that a man should not live beyond his means.

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Despite the dent in profits that this could mean, retailers signed up throughout the early 1950s, enticed by Diners Club’s persuasive argument that people with cards spend more than those without.

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