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J.P. Williams, 88; Banker Was Instrumental in Making All-Purpose Credit Card a Viable Idea

Times Staff Writer

Joseph P. Williams, who spearheaded creation of BankAmericard, the first successful all-purpose credit card that provided both convenience and instant personal credit, has died. He was 88.

Williams died Nov. 8 of natural causes at his home in Atlantis, Fla.

The pioneering banker certainly did not create the first credit card. Small banks had tried the concept in local areas since the 1940s, and oil companies and department stores had their own installment-purchase versions.

Diners Club successfully introduced the first travel and entertainment card in 1950, establishing the concept that one card could be used to buy different things at different places. American Express offered a competitive card in 1958. But both required users to pay the bill within 30 days. They were convenience cards, and did nothing to extend credit to those who couldn’t pay for what they were buying.

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But on Sept. 18, 1958, San Francisco-based Bank of America dropped 60,000 BankAmericards into the mailboxes of Fresno. The first all-purpose credit card had landed. The card enabled a user to buy various goods and services without cash, either as a convenience by paying the bill in full at the end of the month, or as a paperless loan, paying in installments with an interest charge added.

The cards were next showered on Modesto, then Bakersfield, San Francisco, Sacramento and finally Los Angeles. Within 13 months, some 2 million credit cards blanketed California, and 20,000 merchants agreed to accept it, giving Bank of America 6% of each sale for the privilege.

Two months later, Williams resigned.

The all-purpose credit card called BankAmericard, which was licensed to banks in other states in 1966 and renamed Visa a decade later, was far from an instant success.

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Bank of America lost $8.8 million in the credit card’s first 15 months. Delinquency in payments reached 22%; Williams had never established a collection department; fraud was rampant; and politicians, clergy and editorial writers denounced the bank for promoting what they considered an immoral credit-oriented economy.

“The biggest thing a credit card can do is enable families to take advantage of sales -- to buy your skis in the summer and your barbecue grill in the winter,” Williams once told Joseph Nocera, editorial director of Fortune magazine, defending his product.

“I wanted people to understand that their goal should be to make credit pay them, instead of having them pay for credit.

“If they overspent,” he added dubiously, “then you might have to rap their knuckles once in a while.”

Nocera set forth in detail the problematic history of Williams’ innovative card in his 1994 book “A Piece of the Action: How the Middle Class Joined the Money Class” and in a related article he wrote that year for the Washington Post called “The Day the Credit Card Was Born.” He has called Williams both a “pioneer” and “a trailblazer” of the credit card industry.

According to Nocera, critics made Williams the “fall guy” for the BankAmericard start-up failures, citing his lack of experience in bank loan departments.

Williams blamed the problems on Los Angeles, contending that bank branches in the city were too lax in screening cardholders. In one infamous example, Nocera noted, Los Angeles branches were asked to list customers who should never get a credit card, then by some mix-up, issued a card to each person on that list.

The greatest fraud, according to Nocera, occurred in Los Angeles -- with prostitutes lifting cards from johns, and crooks learning to spend limited amounts on each card so that the bank was never called. Thieves also stole un-embossed BankAmericards from the bank’s warehouse, and blackmailed the bank into buying them back by threatening to emboss the cards and run up charges.

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Part of the problem may have been Williams’ naive belief in the honesty and creditworthiness of the “little fellow” that Bank of America founder A.P. Giannini, who died in 1949, sought to serve. A staunch admirer of Giannini, Williams, after serving as an infantry officer in Germany during World War II, took his University of Pennsylvania degree and drove from his native Newark, N.J., to San Francisco to ask Giannini for a job.

By the mid-1950s, Williams had become a senior vice president in charge of the six-man Customer Services Research Department. Unofficially, they were expected to create the all-purpose credit card.

Williams, according to Nocera, studied previous failures and the successful credit operations of Sears and Mobil Oil where he had well-placed friends. Williams devised some features that served as the credit card standard for more than three decades -- the 25-day grace period and 18% interest, credit limits and “floor limits,” or the amount that could be charged without the merchant calling the bank for approval.

Despite the early failures, and Williams’ departure, BankAmericard survived and grew. And Williams continued to develop the credit card industry by starting the Uni-Serve Corp. in 1962 to buy Chase Manhattan Bank’s struggling credit card operation.

He paid the $9 million due on Chase’s billings and in 1965 sold Uni-Serve to American Express. Williams remained president of the unit for another year and chairman until 1968. That card became Unicard, and holders later received Visas.

Williams also operated the New York Standard, a newspaper which operated for 90 days during New York City’s newspaper strike in 1963.

He is survived by his wife, Irene; three children, Joseph Jr., Carol Williams Boise and Diane Williams Murphy; three grandchildren; and two great-grandchildren.


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