carte blanche

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Diners Club

Type	Subsidiary of Discover Financial
Founded	1949
Founder(s)	Frank X. McNamara Ralph Schneider Matty Simmons Alfred Bloomingdale
Headquarters	New York City, NY, USA
Industry	Finance
Products	Credit cards
Website	http://www.dinersclub.com

Diners Club International, originally founded as Diners Club, is a charge card company formed in 1949 by Frank X. McNamara, Ralph Schneider, and Matty Simmons. When it first emerged, it became the first independent credit card company in the world.

Founding

The first credit card charge was made on February 8, 1949 by Frank McNamara, Ralph Schneider, and Matty Simmons at Major's Cabin Grill, a restaurant adjacent to their offices in the Empire State Building. Frank McNamara was bought out two years later by department store heir Alfred Bloomingdale. Schneider died in the early sixties. Simmons resigned in 1967 to form the publishing company that became the National Lampoon Inc. Bloomingdale resigned from the Diners Club a few years later. During that approximately 20 year period, these four men were the only major participants in the Diners Club operation.

Diners Club created what would later be dubbed the Travel & Entertainment (T&E) card market, which focused on cardholders who were frequent travellers and had a substantial income to pay for other high-value charges. As these customers had no need to pay for purchases over time, these cards required that the entire balance of the bill was paid upon receipt. This type of account is known today as a charge card. Diners Club's monopoly was short-lived, however, as American Express and Carte Blanche (which later partnered with Diners Club) began to compete with Diners Club in the T&E card market.

Diners Club also faced competition from banks who issued revolving credit cards through BankAmericard (later renamed VISA), and Interbank MasterCharge (later renamed MasterCard) towards the end of the 1960s. Diners Club began early on to allow franchises of the Diners Club name, at first in Europe and later throughout the world, for many years eclipsing the BankAmericard or Interbank MasterCharge networks abroad. Amoco gasoline also issued its own co-branded Diners Club cards for a time called, American Torch Club, as well as Sun Oil Company with its version called Sun Diner Club Card.

Diners Club International, the franchisor that holds rights to the Diners Club trademark, was acquired in 1981 by Citibank, a unit of Citigroup, as well as many of the largest franchises worldwide, although a majority of its franchises abroad remain independently owned.

MasterCard alliance

In 2004, Diners Club announced an agreement with MasterCard. Diners Club cards issued in the United States and Canada now feature a MasterCard logo and 16-digit account number on the front, and can be used wherever MasterCard can. Cards from other countries continue to bear a 14-digit account number on the front, with the MasterCard logo on the back.

Carte Blanche

Carte Blanche originated as a Travel & Entertainment (T&E) card owned by Hilton Hotels, and competed with both American Express and Diners Club. The company changed ownership after being sold by Hilton, with Citibank owning the company for a brief period during the 1960s, and finally repurchasing it in 1979, and phasing the card out of service in the late 1980s. Throughout most of the 1960s and 1970s, the Carte Blanche card was considered to be a more prestigious worldwide travel and entertainment than American Express or Diners Club, though its small cardmember base hindered its success. Carte Blanche also was the first to implement a 'Gold Card' program^{[citation needed]}, but initially only as a means to recognize cardholders who were frequent users and paid their bills on time. In 2000, the Carte Blanche name was revived in the United States when Diners Club, which was also acquired by Citibank in 1981, introduced an upscale version of its card: the Diners Club Carte Blanche Card. It is an upper-level charge card on par with the American Express Platinum card. The card carries a US$300 annual fee and offers an extensive menu of perks geared toward spendthrifty travelers. It is accepted wherever regular Diners Club cards are accepted. Although Diners Club requires payment in full within 30 days, corporate accounts can pay within 60 days without penalty.

enRoute

Diners Club expanded its customer base in Canada by acquiring the enRoute card from Air Canada in 1992, and marketed the card under the combined name for a period of time as the Diners Club/en route Card. Diners Club remains a minor player in Canada.

Acquisition by Discover Card

In April 2008, Discover Card and Citibank announced that Discover would purchase the Diners Club Network from Citi for $165 million. In May 2008, the U.S. approved the transaction. Discover stated that the Diners Club network, which is a major network outside North America will be merged with the Discover Network which is a major network in North America, creating an international network for Discover Cards and Diners Club cards. Diners Club cards will continue to be issued by Diners Club International licensees, including Citibank. Discover Bank has no plans to issue Diners Club branded cards. Discover purchased the network, but not the licensees issuing the cards. The deal was completed on July 1, 2008.

See also

• Credit cards

External links

• Diners Club International
• Diners Club USA
• Diners Club Canada
• Diners Club and MasterCard alliance press release
• Discover buying Diners Club International
• Discover gets antitrust OK for Diners Club buy, Reuters

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