In the UK alone, we now owe £54 billion in credit card debt. How did it ever get to this? Like many of the great inventions, it all started with an innocent story and a genuine solution to a genuine problem.

In 1949, successful businessman Frank McNamara was eating with business friends in a New York restaurant. When the check arrived, he realised he had forgotten his wallet. The story then gets a little hazy; he was either recognised by the restaurant owner and allowed to pay at a later date, or was rescued by his wife bringing him cash.

Whatever the situation, his embarrassment prompted him to develop the Diners Club Card, initially accepted in 14 New York restaurants and issued to 200 members.

Originally, the card didn’t charge interest, allowing members to ‘buy now, pay later (in full)’, with the Diners Club initially paying the restaurant as the middle-man. Instead of charging interest, the restaurants were charged a 7 percent fee of each transaction, and each member paid $3 annually.

Even though 20,000 Americans signed-up during the first year, McNamara thought his idea was a fad, and after three years, sold-out to his partners for $200,000.

Unfortunately for us, it seems, the fad has lasted a little longer than he predicted.

Image copyright Smithsonian National Museum of American History.