Thread: The History of Diners Club Charge Cards

The year 1950 marked the beginning of Diners Club, when Frank McNamara issued 200 cards to his associates who often went out to eat with their clients. This marked the world’s first independent credit card company. It started with fourteen New York City restaurants. Both the member base of customers and restaurants grew for Diners Club. By the end of the year they had over 1000 participating restaurants and 20,000 customers.

In 1952, only two years later, Frank McNamara sold off his ownership of Diners Club to Texan Joe Williams. However the other two co-founders, Ralph Schneider and Casey Taylor, remained active in the company. Diners Club continued to grow in popularity, spreading across the United States. The Diners Club cardholder base was primarily made up of affluent individuals who traveled often. They had no need to carry a balance since they could afford to pay charges in full, marking a system which today is called a charge card. This type of market base became known as the ‘travel and entertainment” category for credit and charge cards.

Although Diners Club was the only charge card on the market, the competition Carte Blanche and American Express were quickly launched. American Express even began with an annual fee one dollar higher than Diners Club to create the image it was the premium choice among charge cards. During the 60’s and 70’s cards offering revolving credit caught on – first BankAmericard (Visa) and MasterCharge (MasterCard) cut into the charge card market. Diners Club identified the need to be one step ahead by franchising their name to the rest of the world. This temporarily worked as they carried most of the market in Europe and other foreign countries - beating out competing credit cards.

In 1981, Citigroup purchased the rights to the trademark from Diners Club International. However many of the foreign Diners Club franchises today still remain separately owned and operated. In 1992, Diners Club purchased the Air Canada card, enRoute, to expand its market in Canada.

MasterCard struck an arrangement with Diners Club in 2004. The terms were that domestically (in U.S. and Canada) the Diners Club card would now use MasterCard’s logo and account numbering on the front. This strategic move was crucial to keep Diners Club in the game, as major credit cards like MasterCard had a significantly bigger network of merchants. Outside of the United States and Canada, Diners Club would have the MasterCard information on the back of the card instead. Today, Diners Club continues to operate as a subsidiary of Citigroup.

The two charge cards currently offered by Diners Club:

Diners Club Charge Card – the card carries an annual fee of $95 and offers various travel benefits as well as one mile or point for every dollar spent.

Carte Blanche Charge Card – with an annual fee of $300 this card offers extended travel benefits, notably unlimited access to companion airfare tickets on British Airways.