In 1958 Bank of America mailed 60,000 active, unrequested credit cards to residents of Fresno, California. The gamble caused financial chaos and created the modern credit card. This episode starts earlier, with metal charge coins on key rings, the Charga-Plate of 1928, the airlines’ Air Travel Card, and the Diners Club card of 1950, which still had to be paid in full each month. What blocked a universal revolving card was a standoff: merchants would not accept a card nobody carried, and shoppers would not carry a card nobody accepted.

Mass mailings broke that standoff, and by 1970 roughly 100 million unsolicited cards had reached American mailboxes before the government banned the practice. The episode then opens up the hidden plumbing of every swipe, from authorization and batching to settlement and funding, and explains how banks profit from both kinds of customer: revolvers who pay compounding interest and transactors whose purchases generate interchange fees that every shopper ends up covering.

• Bank of America chose Fresno because about 45 percent of the city’s residents already banked with it.
• Betty Furness, a special assistant to President Johnson, compared handing out unsolicited cards to giving sugar to diabetics.
• Before Visa’s first CEO, Dee Hock, led the push to computerize authorization in 1973, clerks checked card numbers against printed books of stolen and invalid accounts.
• The 1978 Supreme Court decision in the Marquette case let national banks charge the interest rates of their home state, which sent card issuers to South Dakota and Delaware.
• Merchants pay interchange fees of 1 to 6 percent and raise prices for everyone, so a 2010 Federal Reserve study found that cash payers effectively subsidize cardholders’ rewards.