In this world of cashless transactions and electronic transfers, it might be interesting to know about the invention of credit cards and how it came to be marketed as it is today:First entry:The the first credit card was invented by Mr. Francis McNamara of NewYork. While dining at a restaurant called Major Cabins Grill in New York, he observed that there were many cash transactions going on and often the businessmen ran out of money and had to send for someone else to get the money to pay the bill . Since he got the idea at the restaurant dining table, he called his card the Diners Card. It was made of cardboard and had the person's name and account number written on the back, along with a list of twenty-eight restaurants and nightclubs in Manhattan who accepted him. The annual fee for the card was $5. His lawyer, who helped him with the business, hired a publicist to bring together more restaurants and cardholders for the network. From here Diners Club became the first national credit card. Competitor Reaction 1. Market Follower Strategy: The amount of interest accrued from the transaction attracted a whole host of competitors to follow suit, with very slight changes in the product offered (because the target markets were huge) In 1951 Franklin National Bank in New York created a credit card that could be used at several types of merchants (at the time, Diners was limited to restaurants, hotels, and airline travel expenses). That same year, Diners Club changed all its cards to plastic cards, to better position itself in the minds of its existing customer base of 20,000 members. Later the large Bank of America in San Francisco launched its own card, the BankAmericard, (which evolved into the modern -day Visa card.) Other California banks implemented their own programs, which later became today's MasterCard. In 1958 American Express noticed Diners Club's profits and started its own credit card program to pay for entertainment and travel expenses2. Niche Market Strategy: With this time, banks realized that they would need to carve out niche segments to stand out in the proliferating growth of the credit card business: In 1959, Bank of America issued a "revolving credit" card that it could be used for a wider range of purchases and paid over a longer period of time, with interest. But due to federal banking regulations, the card was only valid in California.