Iron-On Credit Data

Until the 1950s, having credit with a bank or merchant where no one knew you personally was a rare thing, and nothing like the credit card we know today existed.

In 1950, the Diner’s Club issued the first fully general-purpose charge card, and in 1958, the Bank of America issued the first general-purpose credit card (whose balance, unlike that of a charge card, did not have to be paid in full at each statement).

But technologically, these cards still functioned in the same way as the various merchant-specific charge coins, tokens, tags, and cards that had proliferated from the late 19th century through the 1940s–the embossed account number on the card, pressed through carbon transfer paper, facilitated the copying of data, but that data was still transmitted and verified manually.

Enter IBM, the CIA, and a woman named Dorothea Tillia Parry. In 1960, Parry’s husband Forrest was working on an IBM project to attach magnetic data strips to the back of plastic ID cards for CIA officials, and he couldn’t find an adhesive that didn’t warp the magstripe and ruin its data.a broken magnetic strip of the kind used on credit cardsDorothea listened to his problem over their laundry, and she suggested that he use her iron to melt the strip into the plastic. It worked.

The magnetic strip on the back of a new debit card.
The magstripe (and the electronic transmission of transaction data) became the US standard for credit cards in 1969, and the international standard two years later, though carbon impressions at the point of sale persisted for a while longer still. Now embedded microchips are taking over the magstripe’s role, but thanks to Dorothea Parry, it’s hard to imagine returning to a world of analog credit transactions.

Learn more about the technology of credit from IBM and by listening to these related episodes of the BBC World Service podcast 50 Things That Made the Modern Economy:

Illustration of an analog numeric typewriter, superimposed on a paper chart of printed numbers.

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