Tucson AZ Home Loan Info


A Good One On Bank of America... (You Needed a Smile)

Bloomberg: MasterCard hits 52 week high; Mike in Tucson, AZ mortgage lender

~ MasterCard Stock Hits 52 Week High August 3, 2011 ~

Okay.  You need a smile, and I'm here to help out.  Credit on demand was the stock market winner today, keeping the market from having its longest losing streak since 1978.

Do you know how Credit Cards came to be?  I have a Bank of America story for you...

The year was 1958.  Bank of America wanted to get into the credit card business.

Diners Club, the very first credit card, was established in NYC in 1950 by a man named Frank McNamara.  It was accepted at its outset by just 14 restaurants in New York, but within two years, companies had begun to realize the power of credit on demand, and Diners Club had grown dramatically in usage.  Some 400 restaurants and about 200 car rental agencies now accepted payment by credit card. 

McNamara believed that credit cards were a fad that would fade over time, and when he was offered $200,000 for his share of the business, he sold out.  (His heirs would like to turn him over in his grave.)

But I digress.  A man named Joe Williams was a Bank of America employee in California in 1958, and Joe had an idea.  Bank of America would corner the west coast market for credit cards by giving one, unsolicited, to every person in in the fine town of Fresno, California. 

Bank of America mailed out 60,000 credit cards.  (This was before people had credit scores.)  The fine print on the credit cards, each of which had a credit limit of $300, made the cardholder liable for all charges to the card, including fraudulent charges.  The bank couldn't lose.

If big is good, bigger must be better, yes?  Within 18 months, Joe Williams and his bosses expanded the credit card "drop" program dramatically, and 2,000,000 cards were sent, unsolicited, to citizens of California. 

Unfortunately for BofA, 20% of the cards immediately went delinquent.  "Hey," people thought, "free money!"  The bank was ill prepared to deal with delinquency on accounts where nothing could be repossessed.  They were even less prepared to deal with credit card fraud.

Bank of America lost nearly nine million dollars on its credit card launch, and Joe Williams was looking for employment elsewhere.  (See?  I told you I would make you smile!)

Bank of America recovered, but don't you wonder whatever happened to the BankAmericard?  Bank of America changed the name to VISA in 1976.

Today, we Americans have more than six hundred million credit cards in our pockets, wallets and purses.  Credit on demand wasn't a fad, and a card is swiped somewhere in the world ten thousand times each and every second!

I just thought you might like to know...  :)


I'm Mike in Tucson, your preferred Tucson Arizona Mortgage Lender

NMLS #223495

SUNSTREET MORTGAGE LLC ~ Correspondent Mortgage Bank
Offices in Mesa, Tucson, Sierra Vista & Nogales


Comment balloon 30 commentsMike Jones • August 03 2011 09:23PM


Thanks for posting.  I enjoyed reading it.  I will keep it in mind.  Thanks again.

Posted by Tara B. Downing, Homes For Sale - Mineola Port Washington (Village Properties ) over 9 years ago


Thanks for being the first to comment!

Mike in Tucson

Posted by Mike Jones, Mike Jones NMLS 223495 (SUNSTREET MORTGAGE, LLC (BK-0907366, NMLS 145171) ) over 9 years ago

Hi Mike-

I actually read your fine post and remember well the first unsolicited credit card that I received. I was all of 17. It was shocking to me that the bank just mailed it out!  This was in the days before credit cards used credit scoring and if you had a bank account, companies would just mail one to you.

Now, self-employed people can barely get a mortgage and the documentation required is extensive.... 

--Sara in San Antonio


Posted by Sara Woolford & Steve Golson, ALHS (iTexas Realty Co.) over 9 years ago

Thank you.  I forgot they changed it to Visa.  We use MasterCard for credit....and a Visa for debit.  Hopefully, Visa doesn't get ANY money.  And, we pay off the MC as soon as possible, but it is great for emergencies.

Posted by Suzanne McLaughlin, Sabinske & Associates, Realtor (Sabinske & Associates, Inc. (Albertville, St. Michael)) over 9 years ago


Very interesting story, just leave home without it.

Good luck and success.

Lou Ludwig

Posted by Lou Ludwig, Designations Earned CRB, CRS, CIPS, GRI, SRES, TRC (Ludwig & Associates) over 9 years ago

Great story. I never knew the history of the credit card. Thank you for sharing that. I will definitely remember this one! Active Rain is so great for learning new things! Awesome!

Posted by Diane Grady (Endless Summer Realty) over 9 years ago

Good story, scary stuff credit cards, we all grew up with them and it is hard to use cash in many circumstances, especially with the advent of internet buying.

Posted by Mary Macy, Top Agents Atlanta Metro (Top Agents Atlanta Metro) over 9 years ago

Mike - Thank you for sharing quality information on the history of credit cards and BofA credit cards

Posted by John Pusa, Your All Time Realtor With Exceptional Service (Berkshire Hathaway Home Services Crest) over 9 years ago


You're welcome; thanks for stopping by.


That's a good point, and people are forced by the FICO system to have credit if they want to buy a home today.


Isn't this a great community?!


That's hard to do in this day and age.


That it is; thanks for stoppin by to comment.


I'll bet you were one of the responsible cardholders, though.  Thanks for contributing to my blog.

Mike in Tucson

Posted by Mike Jones, Mike Jones NMLS 223495 (SUNSTREET MORTGAGE, LLC (BK-0907366, NMLS 145171) ) over 9 years ago

Ah!  Memories.  I had a Diners Club.  Am I dating myself??? 

Too late.

Posted by Lenn Harley, Real Estate Broker - Virginia & Maryland (Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate) over 9 years ago



Mike in Tucson

Posted by Mike Jones, Mike Jones NMLS 223495 (SUNSTREET MORTGAGE, LLC (BK-0907366, NMLS 145171) ) over 9 years ago

Mike - nice story, and I am not surprised that Bank of America found a way to lose money on a great idea. Thomas Jefferson was probably laughing in his grave.

Posted by Larry Brewer - Benchmark Realty llc (Benchmark Realty LLc) over 9 years ago

That did make me smile!  They were aggressive just sending out $300 of FREE money.

Posted by Chuck Carstensen, Minnesota Real Estate Expert (RE/MAX Results) over 9 years ago

Wonder how the 20% deliquency rate on the credit cards compares to mortgate deliquency for BoA (including Countrywide).

Posted by Cindy Jones, Pentagon, Fort Belvoir & Quantico Real Estate News (Integrity Real Estate Group) over 9 years ago

That is a very interesting story about the history and birth of the credit card.  I'm sure the initial loss they more than made up for over the years. 

Posted by Eileen Hsu, LICENSED REAL ESTATE SALESPERSON (Douglas Elliman Real Estate) over 9 years ago

Great history lesson for all of us in the financial sector and yes it did make me smile. Thanks!

Posted by Jim Poole, Zero Down, USDA Purchase Loans, FHA 203(K) Rehab & VA Streamline Loans over 9 years ago

Hello Mike,

Nice history lesson...gee, Bank of America lost money then and the continue to - unfortunately, it's the taxpayers money!

Posted by Lisa Von Domek, ....Experience Isn't Expensive.... It's Priceless! (Lisa Von Domek Team) over 9 years ago

Very informative!  To think the credit card has evovled in my lifetime!  Incredible!

Posted by Barb Merrill, GRI, Associate Broker (Cactus Mountain Properties, LLC) over 9 years ago

I never had a Diners Club card but Visa and American Express have been my card of choice. Thank you for your interesting blog about credit card history :-)

Posted by Ann Nguyen, Lake Tahoe Truckee Homes For Sale (eXp Realty of California, Inc.) over 9 years ago

In 50 years they'll be writing about how BOA managed their short sales. I wonder what history will say.

Posted by Dave Halpern, Louisville Short Sale Expert (Keller Williams Realty Louisville East (502) 664-7827) over 9 years ago

That's hilarious!  I forgot that I used to get credit cards in the mail all the time even 8 - 10 years ago!  Wow how things have changed!

Posted by Gabriel Leyba (Leyba Real Estate LLC) over 9 years ago

Do you mean to tell me that only a mere 53 years ago people paid for what they purchased with CASH and relied on their means to obtain things?  And civilizations grew AND prospered without credit cards?!?  Amazing! 

Posted by Carla Muss-Jacobs, RETIRED (RETIRED / State License is Inactive) over 9 years ago

Why am I not surprised by the 20% delinquency rate? Same old problems in this country!


Posted by Donald Reich (Prudential Centennial) over 9 years ago

That was a very interesting story! Thank you for sharing it!

Posted by Sarasota & Manatee Counties FL, QuickFreeMLS.com - Listings In Paradise (SaraMana Properties - QuickFreeMLS.com) over 9 years ago

Mike - I have a vague recollection of BankAmericard, but didn't realize it was a precursor to Visa.  Thanks for the history lesson and the smile.

Posted by Christine Donovan, Broker/Attorney 714-319-9751 DRE01267479 - Costa M (Donovan Blatt Realty) over 9 years ago

Interesting story about the history. Although I was but a mere toddling child, I remember the Diners Club card and the Bankamericard. Love the reminder.

Posted by Sandy Acevedo, RE/MAX Masters, Inland Empire Homes for Sale (951-290-8588) over 9 years ago


Oh, come on!  You weren't even born yet.  LOL!


You're most welcome; thanks for stopping by.


You're welcome!


Their stock sure took a beating in the last several days, didn't it?!


I tried to pay cash for gas yesterday at Costco, and they wouldn't take it!


Ain't it the truth!


I sure miss Paul Harvey!


I bet it won't be good.


You're welcome! Thanks for stopping by to comment.


I thought the same thing!


Use the only weapon you have: VOTE!


Thanks for mentioning the smile!


No doubt!


Have you noticed what's happened to B of A's stock price since last Friday?!


Yes they were!


Thomas Jefferson saw this coming.  I'm re-reading the Federalist Papers.

Mike in Tucson

Posted by Mike Jones, Mike Jones NMLS 223495 (SUNSTREET MORTGAGE, LLC (BK-0907366, NMLS 145171) ) over 9 years ago

Interesting post.


Bank of America was losing money back then and they are losing today.


Posted by Keith Lawrence, ABR, SFR (Christie's International) over 9 years ago

Interesting post , thanks for sharing.

Posted by James Loftis, RealEstate911.com (RealEstate911.com) over 9 years ago

Hello Mike - This does bring back some memories.  I remember my father having a Diners Club card when we lived in NY.  Very interesting story did not know the history behind the credit card.  I am going to reblog this great story.  Thanks for sharing.

Posted by Kari Battaglia, PA, Love Where You Live (RE/MAX Platinum Realty) over 9 years ago

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