#FlashbackFriday: 1986—The Exchange Begins Accepting Credit Cards

Thirty-eight years ago this weekend, on Jan. 6, 1986, Exchange stores began accepting VISA and MasterCard in CONUS, Panama, Greenland and for catalog orders. Card acceptance expanded to other overseas locations later in the year, and the Discover card was added to the accepted-cards list by 1987.

Pictured above is then-Exchange Commander Maj. Gen. John Long, center, witnessing one of the first credit-card transactions at the Dallas Naval Air Station in Grand Prairie, Texas

A month earlier, the House Armed Services Committee approved allowing military exchanges to accept credit cards. According to a Winston-Salem Journal article from Jan. 6, 1986, the decision allowed an estimated 2.1 million members of the armed forces to use the cards in exchanges. The Army & Air Force Exchange Service was the first to work out a credit system acceptable to the Department of Defense.

Discussion of credit-card use at exchanges had been ongoing for about a decade. Exchanges wanted to allow the card because their use had been common. According to one survey, more than 50% of military shoppers used credit cards, and their use in the civilian sector was affecting exchanges’ ability to compete.

By the time the decision was approved, the Exchange already had a credit program, the Deferred Payment Program (DPP), approved by Congress in 1979—but it was only available at overseas exchanges, where it was used to protect service members from predatory lenders who would set up outside the gates. In 1992, the DPP was expanded to CONUS, where it evolved into the MILITARY STAR card, which launched in 2000.

Click here for a timeline showing the Exchange Credit Program’s evolution through its first 40 years.

Sources: Exchange Post archives; “Military Post exchanges Now Accepting Credit Cards for Purchase of Merchandise” by Bill East, Winston-Salem Journal, Jan. 6, 1986