Frank McNamara and Diners Club: The Forgotten Wallet That Built Credit

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The legend says that in 1949 Frank X. McNamara finished a meal at Major's Cabin Grill in New York City, reached for his wallet, and found his pocket empty. Mortified, he dreamed up a multipurpose charge card and pitched it the next day to his lawyer, Ralph Schneider, and his friend Alfred Bloomingdale. This episode examines that origin story, including the conflicting accounts of what happened and the claim by press agent Matty Simmons that the whole scene was invented for publicity.

Whatever the truth, the business was real. Diners Club launched on February 8, 1950 with 1.5 million dollars in capital, 200 members, and 27 participating restaurants. Cardholders paid 5 dollars a year and settled one bill each month, while restaurants gave up 7 percent of every check in exchange for free spending customers. Membership reached 42,000 by the end of 1951. Then, in 1952, McNamara sold his entire stake for 200,000 dollars and walked away from the industry he had started.

In February 1950 McNamara returned to Major's Cabin Grill and paid with a cardboard card and his signature, an event historians call the First Supper.
Diners Club paid restaurants before collecting from members, which made it a short term lender managing a risky float in an era before credit scores.
Bloomingdale briefly left to start a California rival called Dine and Sign, then merged it back into Diners Club.
The card's success alarmed banks and prompted BankAmericard and Master Charge, the networks now known as Visa and Mastercard.
The brand became a cultural shorthand, inspiring a 1961 board game and a 1963 Danny Kaye film, and it was later owned by Citibank and then bought by Discover in 2008 for 165 million dollars.

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