September 18, 1958 seemed like an ordinary day in Fresno, California. But something happened in the city that day that changed the world forever. An event that helped shape our modern financial system and the cashless economy we know today. The birth of VISA and the modern credit card, with the “Fresno Drop,” today on KVPR’s Central Valley Roots.
Charge cards had existed for years before 1958, but were primarily issued by retailers, like department stores or gas stations. And cards like Diners Club and American Express were just starting to gain popularity.
In California, the Bank of America was eager to enter the credit card game, and Fresno was the perfect test market. On September 1958 the bank sent our 60,000 credit card to their Fresno area customers – unsolicited. It was known as the BankAmericard, and it was the first bank-issued credit card. The event became known across the financial services industry as the “Fresno Drop.”
It wasn’t without challenges. Delinquency rates were as high as 22 percent, well above expectations. But soon the card expanded to more markets in California, and ultimately nationwide. The card was later licensed to other banks and spun off into its own company, which was renamed VISA in 1976. Today VISA handles almost 17 trillion dollars in annual transactions worldwide, and it all started in Fresno.
