Credit: Toward a Cashless Society

To prove the effectiveness of its own credit card, the Bank of America earlier this year hired a comely San Francisco secretary named Ann Foley to live on it—and nothing else—for a month. Miss Foley went pretty far on the Bank-Americard: she ran up $1,728.98 in bills for the nation’s largest bank, found that about the only inconveniences she suffered were having to hire cars instead of cabs, avoiding tolls and passing up soft drink machines. Now U.S. banks are busy trying to discover just how far they can go with credit cards.

Last week The Chase Manhattan Bank, the nation’s third largest, and Diners’ Club announced that they are discussing “the possibility of developing a closer relationship.” The relationship —whether worked through merger or outright purchase—is clearly aimed at stepping up Chase Manhattan’s competition with First National City Bank, the second largest U.S. bank, which bought up half of Hilton’s Carte Blanche in September. This week, after a two-month advertising barrage, Pittsburgh’s two largest banks—the Mellon National and the Pittsburgh National—will expand their longtime competition to a new dimension by bringing out their own credit cards.

Also for Veterinarians. Some 70 U.S. banks now have their own credit cards. The lure: big profits. American Express credit-card sales rose 40% last year to $340 million; Diners’ Club rose 28% to $210 million. This rapid growth has, in fact, attracted far more than the banks. Dozens of new credit-card plans, ranging from neighborhood to countrywide, are popping up across the U.S. California’s Transamerica Credit Corp. issues cards for individual shopping centers that enable the shopper to gas up her car, buy in a wide variety of shops, eat lunch and have her hair done. Los Angeles’ Ail-American Acceptance Corp. has come out with a complete card for the automobile owner, who can use credit for repairs, new parts and the purchase of seat covers or tires. Universal Western Corp., a new Colorado company, issues cards that are honored by doctors, dentists and veterinarians as well as by retailers; unlike most other card plans, it actively seeks college students as customers.

Annoyed at the service charges and deferred payment of national card plans, restaurants in some cities have banded together to form their own credit plans; in Seattle, 15 restaurants have thus managed to reduce costs and arrange for immediate payments from cooperating banks, have even got 94 other merchants to join them. The major transatlantic steamship lines are thinking of issuing a card, something like the air-travel card, that would cover passage and shipboard purchases. Oil companies, which have offered oil and gas on credit for years, are now offering a whole new line of credit possibilities. Mobil cards can be used for car repairs and motel bills, American Oil cards for hotel, motel and restaurant bills, Esso cards for life insurance.

Badge of Status. Despite the new competition, most card-company executives predict an almost limitless market for credit carding. Bank of America Vice President Kenneth V. Larkin says that only one in every seven families in California now has a credit card, estimates that one out of three—possibly even two out of three—is in a good enough economic position for card ownership. Thomas W. Gormly, senior vice president of the Pittsburgh National Bank, predicts a new era of credit-card merchandising, believes that the U.S. is already a “long step toward a cashless and checkless society.” Dags, a chain of 19¢-hamburger stands in Seattle, thinks so too. Recently it printed its own garishly embossed credit cards and sent them to 500 leading citizens. The cards immediately became Seattle’s newest, if ephemeral, badge of status.