Credit cards that we use today have been all around for over half a century. The first credit card appeared in the year 1951 when some of the loan customers of the Franklin National Bank of New York were screened for credit and those who were approved were given a card to make credit purchases. The merchants who participated copied the customer information from the card to the sales slip and then the bank credited the merchant account for the loan.

Later, in the year 1958, The American Express Company began to issue a charge card for travel and entertainment charges which was accepted at the restaurants, hotels and online merchants who participated.

People who had plastic charge cards enjoyed the convenience as well as the line of credit being offered by the new bank credit cards. Merchants found that credit card customers usually spend more than when it came to pay with cash. To accept bank issued card was much safer for the merchant dealing with cash and also less expensive as compared to creating and maintaining merchant-specific credit program.

In the year 1959, Bank of America started to issue the BankAmericard within the state of California and was the first universal credit card with wide spread merchant acceptance. In 1966, Bank Card Associations began and it was the time when Bank of America formed licensing agreements with other banks. This made it possible for them to issue credit cards on a widespread basis and also to settle transactions among the participating banks.

In 1966, a group of 14 US banks formed interlink a new bankcard processing association with the ability to exchange information on credit card transactions. In the year 1967, four California banks formed the western states Bankcard Association and also introduced the Master Charge program to compete with the BankAmericard which was later renamed as Visa in the year 1976.
Visa and MasterCard are organizations both of which issue credit cards through member banks and also set and maintain the rules for processing.

With the passing time, as the bank card industry grew, banks were interested in issuing cards also became members of the Visa Card Association or the MasterCard Association.