Credit card

The credit card emerged because Bank of America decided to discover what would happen if you mailed 60,000 unsolicited pieces of plastic to the residents of a single California city—and the resulting chaos transformed consumer finance.

On September 18, 1958, Bank of America executed the 'Fresno Drop,' mailing BankAmericards to 60,000 Fresno residents without warning. Each card came pre-approved with $300 to $500 in instant credit. Over 300 merchants had agreed to accept the cards in advance. The recipients didn't apply; they simply received purchasing power in the mail.

The mastermind was Joseph P. Williams, who led BofA's Customer Services Research Group. Williams had convinced bank executives in 1956 to pursue what became the world's first mass mailing of unsolicited working credit cards. Fresno was chosen deliberately: population 250,000 (large enough to sustain a credit system, small enough to control damage), Bank of America's 45% market share, and geographic isolation to limit public relations fallout if the experiment failed.

It nearly did. Williams had been too trusting in the basic goodness of customers. Twenty-two percent of accounts became delinquent—not the 4% projected. Police confronted a wave of credit card fraud, a crime that had barely existed before. Bank of America officially lost $8.8 million, but with advertising and overhead, actual losses approached $20 million. Williams resigned in December 1959.

Yet the concept survived its disastrous birth. BankAmericard showed its first profit in May 1961. By 1968, profits reached $12.7 million. In 1970, Bank of America ceded control to a cooperative of issuing banks. In 1976, the cooperative renamed itself Visa.

The mass mailing of unsolicited credit cards was eventually outlawed in the United States. But by then, the behavioral transformation was complete. Americans had learned to buy now and pay later. The Fresno Drop didn't just launch a product—it rewired consumer psychology around credit, debt, and instant gratification.