The man who helped create charge cards learned about creative financing early on.


One day, when George Zarafonetis was a senior at Woodrow Wilson High School, his mother told him that he was going to “go to college,” and not just any college. “You’re going to SMU,” she said.


‘But how could my family afford SMU?’ he remembers thinking. Then his mother handed him an envelope filled with money, all the money he had earned during his paper-throwing years, from the age of 13 through high school  … enough money to pay his tuition at Southern Methodist University for the first year.


At the end of that year, the money was gone. “My father, in his usual immigrant way, requested a meeting with the dean of the college. At that time, FDR had a financial assistance, work program available to students, and the dean put me to work through that [program]. I earned my tuition for the next three years.”


It’s been nearly 60 years since he bought his class ring, but Zarafonetis still proudly wears it. It is a ring to be admired. “I paid 33 dollars for it. You couldn’t replace it these days.” He explains that as a 1941 graduate, he was one of the last recipients of a Bachelor of Science in Commerce degree from SMU. After that year, it became the Bachelor in Business Administration.”


Upon his return from WWII, Zarafonetis continued to pursue his career in customer credit lending, obtaining his early work experience with Sears Roebuck and Company, and the Bureau of Labor and Statistics.


“When I was in school, there was no such thing as consumer credit. Consumer finance was a brand new field back in the 30s and 40s,” says the first-generation Greek-American. Zarafonitis grew up in a close family, but he speaks with similar affection for the man who, in 1954, gave him his big break in banking.


“I was president of the Consumer Manager’s Association when I first met Weldon Howell,” he explains. Howell was president of the privately held Highland Park State Bank, and when Zarafonitis joined the bank, he says it was the beginning of a long and successful partnership between the two men.


Zarafonitis was put in charge of an innovative consumer finance program known as the Highland Park State Bank Charge Card. The emerging world of “cash and carry” was in its infancy, but Howell and Zarafonitis, with all their banking clout, moved things along a little faster.


The need for more space prompted the Highland Park State Bank to move from Mockingbird Lane and Preston Road (Ralph Lauren’s store today) to Preston Center in 1958. Now the Preston State Bank offered the Presto Charge. Zarafonitis, as vice president of consumer lending, was now in the catbird seat of an entirely new financial world.


Local merchants valued the idea of “no-risk business.” They got their money up front, in full, and loyal area retail customers liked the idea of the bank’s “open loan policy.”


The bank was, also, a friend of both the dental patient and the dentist. By helping families finance large bills through the Dental Payment Plan and offering dentists loans to start their practice, Zarafonetis earned the respect of many. Greatly  esteemed by the dental profession, the Dallas County Dental Society made him an honorary dentist. He still holds the title 15 years after retiring, and good friends affectionately call him Doc.


So well executed was Preston State Bank’s customer finance program, it was heralded as “one of the best in the country,” Zarafonitis proudly states. Prior to Mercantile State Bank’s (MBank) acquisition, and after it went public, a group of industry experts appeared on the bank’s doorstep. Their purpose for being there . . . to study and recreate the Presto Charge, but not just for Texans, for the country, maybe even the world. MasterCard was born. The rest is history.


And Dr. George Zarafonetis can claim some of the credit. No pun intended.



Policing the Credt Cards of Today


1.   Interest Backdating

Be alert to when your credit card posts your purchase. Some charge interest from the date of purchase, days before they have even paid the store on your behalf.


2.   Two-Cycle Billing

Issuers that use this method of calculating interest, charge two months worth of interest for the first month you failed to pay off your total balance in full.


3.   The Right To Setoff

You may have signed an agreement that allows the issuer to obtain funds from your savings account if your account should become delinquent.


4.   Fees Are Negotiable

You may be paying up to $50 a year or more as an annual fee on your credit card and over 20 percent annually in finance charges. A good payment record buys negotiating points.


5.   Introductory Rates

Beware of “teaser” rates such as 7.9 percent. When the low-rate period expires, your existing balance will be subject to the regular and substantially higher interest rate.


6.   Shortening Due Dates

Some banks have shortened the grace period from 25 days to 20 days, but only for customers who pay in full monthly.


7.   Eliminating Grace Periods

That fabulous offer in the mail for a gold card with a 10,000 dollar credit limit may not be so great. The most common “string” attached is that the card has no grace period. You are charged interest on everything from the day you buy it, even if you pay on time.


8.   Disappearing Benefits

Many banks enticed you to sign up with extra benefits such as lifetime warranty, a five percent discount on all travel, or protection if an item purchased is lost. Now, some banks have cut back on these extras without the fanfare that launched them.


9.   Double Fees On Cash Advances

Most credit cards impose both finance charges and a transaction fee on cash advances. Interest starts from the day of the advance, and the transaction fee can be up to two percent of the amount taken. Beware of cards advertising “no finance charges.” Transaction fees still apply.


10. Fewer Rights on Debit Cards

Some Visa and MasterCard accounts have payments deducted directly from your checking account (debit cards). Under federal law, you technically don’t have the same right to “charge back” problem purchases as you do with a conventional credit card.


11. Misleading Monthly Minimums

The bank stands to make far more money from two to three percent minimum payments of your balance. The longer you carry out payments, the more you pay.


12. Interest From Day One

There is no grace period on new purchases on most cards. The 20-25 day grace period where no finance charges accrue does not apply when you don’t pay in full each month.