# A bank mailed 60,000 credit cards to one town to see what would happen

URL: https://www.paydude.io/resources/the-fresno-drop
Type: Guide
Published: 2026-09-06 · Updated: 2026-09-06
Summary: Bank of America mailed 60,000 unsolicited live credit cards to one California town in 1958. What went wrong, and how it became Visa.

**In September 1958, Bank of America put roughly 60,000 live credit cards in the post to residents of Fresno, California.** Not applications — working cards, with a credit limit already attached. Nobody had asked for one. It is remembered as the Fresno Drop, and it is why Visa exists.

## Summary

Around 60,000 unsolicited, ready-to-use cards were mailed to a single city. It was an attempt to solve the chicken-and-egg problem every payment network faces. Delinquency ran far above projections and early losses reached millions. Congress banned unsolicited card mailings in 1970; the programme became Visa in 1976.

## The problem they were trying to solve

A credit card is worth nothing to a shopper unless merchants accept it, and worth nothing to a merchant unless shoppers carry it. Sign up merchants first and they wait months for a customer to use one. Sign up cardholders first and they find nowhere to spend.

Bank of America's answer was to skip the adoption curve entirely: create tens of thousands of cardholders in one city overnight, so that merchants had an immediate reason to accept.

Fresno was chosen deliberately. It was large enough to matter, isolated enough that the experiment would not spill into neighbouring markets, and Bank of America already held a dominant share of local banking.

## What went wrong

Almost everything. In Joe Nocera's account in *A Piece of the Action*, the standard history of the period, delinquency ran several times higher than the bank had projected, and losses on the programme reached roughly $8.8 million in its first fifteen months.

- Cards were mailed to people who had never been assessed for creditworthiness.
- Cards were intercepted in the post, and there was no activation step to stop them being used.
- Some recipients concluded the money was free, and behaved accordingly.
- The bank had no fraud tooling, because nothing like this had existed before.

As other banks copied the tactic through the 1960s, it got worse. Live cards were reported as arriving addressed to children, to pets, and to people who had died.

> **Why you cannot do this today:** Congress banned the mailing of unsolicited live credit cards in 1970, in an amendment to the Truth in Lending Act. Issuers may still send applications and pre-approved offers — which is why your letterbox still fills up — but the card itself has to be requested.

## And then it worked

The programme was nearly cancelled. It survived, the losses came under control as underwriting improved, and Bank of America began licensing BankAmericard to banks outside California.

By 1970 the licensee banks had taken the system over as National BankAmericard Inc. In 1976 it was renamed **Visa** — a word chosen because it means roughly the same thing in most languages and carried no American bank's name, which mattered for a network intending to operate worldwide.

## What it explains about payments now

The Fresno Drop is not just a curiosity. Two things about modern card payments trace directly back to it.

**From 1958 to your checkout**

| Then | Now |
| --- | --- |
| No creditworthiness check before issuing | Issuing banks price risk into interchange |
| No way to verify the cardholder | CVV, 3D Secure and risk scoring |
| The bank absorbed every loss | Liability is split between issuer, acquirer and merchant |
| One bank, one city | Four-party networks spanning every country |

The fee you pay today exists because someone had to carry the risk that the person holding the card is not who they claim to be. In 1958 that was entirely the bank's problem. See [what is interchange](https://www.paydude.io/resources/what-is-interchange) for how that cost is distributed now.

## Sources

- Joe Nocera, *A Piece of the Action: How the Middle Class Joined the Money Class* (1994) — the standard account of the Fresno Drop and its aftermath.
- Truth in Lending Act amendments, 1970 — the statutory ban on mailing unsolicited live credit cards.
- Visa Inc. corporate history — the 1970 formation of National BankAmericard Inc. and the 1976 rename.

**Modern payments, published pricing** Rates you can read rather than negotiate. — [See the rate card](https://www.paydude.io/pricing)

## Frequently asked questions

### What was the Fresno Drop?

In September 1958, Bank of America mailed roughly 60,000 live, ready-to-use BankAmericard credit cards to residents of Fresno, California. None of the recipients had applied. The bank was trying to solve the problem that a credit card is worthless until both merchants and cardholders adopt it at the same time.

### Did the Fresno Drop work?

Eventually, but not at first. Delinquency ran far above the bank's projections and losses reached millions of dollars within the first two years. The programme survived, was licensed to other banks, and became Visa in 1976.

### Is it still legal to mail someone a credit card they did not ask for?

No. Congress banned the mailing of unsolicited live credit cards in 1970 through an amendment to the Truth in Lending Act. Card issuers may still mail applications and pre-approved offers, but not an active card.

### How did the Fresno Drop become Visa?

Bank of America licensed BankAmericard to other banks through the 1960s. In 1970 the licensees took control of the system as National BankAmericard Inc., and in 1976 it was renamed Visa so it could operate internationally without a US bank's name attached.