One day in the late 1950s, or so the story goes, newspaper columnist Jimmy Breslin walked into the Manhattan offices of Diners Club with a big problem on his mind.

"Fat Thomas," a local bookmaker whose colorful antics were frequent fodder for Mr. Breslin's widely read articles, had been arrested after using a Diners Club credit card that had been reported stolen.

The bookie was facing serious jail time, which would cost Mr. Breslin a valued source, unless the $6,000 tab he had run up during a three-day dining spree was paid - and Fat Thomas clearly did not have the money.

"If you let Thomas off the hook," Mr. Breslin reportedly told the young Diners Club executive he met with that day, "I'll write six stories for Diners Club Magazine at a thousand (dollars) a pop, and you keep the money to pay off the credit card bill."

The marketer, always looking to enhance Diners Club's visibility through its trade publication, quickly agreed, and Fat Thomas was a free man.

"That story is exactly true," said the marketer, Matty Simmons, now 68, by phone last week from his office at Matty Simmons Productions in Marina Del Rey, Calif.

The Fat Thomas episode is one of many colorful recollections of the credit card industry's formative years that Mr. Simmons relates in his new book "The Credit Card Catastrophe," which is scheduled for release this month by Barricade Books.

While predicting that credit cards will eventually become the predominant form of payment in the United States, Mr. Simmons is highly critical of bankers for what he characterizes as their mismanagement.

"I've long had the feeling that banks should be exercising better controls," he said. "They're not doing right by the public, and they should do something about it. I thought that, since I was one of the guys who kind of gave birth to credit cards, I had the right to say this."

Mr. Simmons, who went on to become publisher of National Lampoon and Weight Watchers Magazine and producer of "Animal House" and the "Vacation" movies, entered the fledgling credit card industry in 1950 after a series of meetings with Diners Club founder Frank MacNamara.

Mr. MacNamara wanted Mr. Simmons, then a 23-year-old press agent with strong connections to several top New York City restaurants, to help promote his creation, a credit card for relatively wealthy individuals that would be honored at restaurants.

At that time it was a truly revolutionary concept - the first credit card that could be used in different locations, with a single monthly bill sent to its holder.

Putting a dramatic touch on his sales pitch, Mr. MacNamara invited Mr. Simmons to lunch one day at Major's Cabin Grill, a Manhattan restaurant frequented by business executives, where he presented the first Diners Club card to pay the bill.

"That first day, when Frank charged his bill, that was really exciting," said Mr. Simmons, who overcame an initial reluctance and agreed to endorse the new product.

Diners Club was a fairly immediate success, building a virtual monopoly in the credit card field until American Express entered the business in 1958. "The growth we saw was so rapid, so enormous," said Mr. Simmons.

He was executive vice president of sales and marketing at Diners Club until 1967, as well as editor in chief of Diners Club Magazine. He helped promote the broadening of its credit base, while expanding card acceptance to airlines, stores, insurance, car rentals, and movie theaters.

"Matty really put credit cards on the map in terms of public interest," said Joe Tilem, who was head of legal operations at Diners Club-West in Los Angeles during the 1950s, and later the mayor of Beverly Hills, where he now practices law.

"It was his idea to expand beyond restaurants into more generic uses," Mr. Tilem added. "He had the publicist's flair."

Mr. Simmons, who spoke to a variety of credit card players past and present in preparing his book, views the eventual dominance of credit cards as a given. He believes, for instance, that cash will eventually be rendered obsolete, perhaps by the middle of the 21st century.

By then, he writes, all purchases will be made through cards and computers, eliminating bank checks as well.

"Little by little, checks are already being phased out," said Mr. Simmons. "Credit cards are both more practical and profitable than checks. Banks would like nothing more than a checkless society."

Mr. Simmons indicates that a cashless society will offer Americans benefits beyond what even Frank MacNamara could have envisioned, such as a considerable diminution of theft and robbery.

"When this happens, violent crime will be cut down enormously, by 75%," he said. "The basic ingredient - cash - just won't be there."

Cards carrying the owners' fingerprints or personal identification numbers will soon thwart even credit card fraud, he believes. "Bank card technology will become so sophisticated that they'll eventually use even voice imprints," he said.

It is Mr. Simmons' attacks on the banking industry that are most likely to provoke controversy, at least among bankers. He is especially dismayed by high interest rates, which he believes are being used to exploit unwary consumers.

He blasts secured credit cards as a "farce," writing that they "should be discontinued if for no other reason than they are unfair to the cardholder - even if he has bad credit - and make the bank look like the Mafia on the docks of Hoboken."

"The idea beyond secured cards is good, but the method is bad," Mr. Simmons explained. "They're charging people for using their own money."

Mr. Simmons also opposes the excessive issuance of credit cards, citing as an example the case of Walter Cavanagh, a 58-year-old California man who, on a whim, has accumulated 1,262 active credit cards with a cumulative charge limit of $1.6 million over the past 18 years.

"The issuance of multiple cards (to one customer) should stop," he said. "Companies can check and control that. The only reason people have 10 or 12 cards is so they can overextend themselves. Why would you need more than one?"

"The Credit Card Catastrophe" contains several case studies of young people and their credit follies. Not surprisingly, Mr. Simmons is an advocate of greater credit education for this age group.

"Young people don't seem to comprehend that they're spending money," he said. "This is because it's all so new to them - they're used to living on an allowance, so they don't know about budgeting. Older people have been through the mill and have learned more because they've been there."

While Mr. Simmons presumably will have some critics, perhaps none will be as vociferous as Spencer Nilson, who was hired by Diners Club in the late 1950s to assist with direct mail solicitation. He is praised as a valuable salesman in "The Credit Card Catastrophe".

Mr. Nilson, publisher of The Nilson Report, an Oxnard, Calif.-based credit card industry newsletter, dismissed Mr. Simmons as "a movie producer who published a book about an industry he's out of touch with.

"He's not interested in the truth about the industry," said Mr. Nilson, acknowledging that he had not read Mr. Simmons' book - and would not do so. "He was instrumental in publicizing it. He should claim almost no credit for the success of it.

"He produces trashy movies, Chevy Chase stuff," continued Mr. Nilson, broadening his attack to include the comic actor featured in several of Mr. Simmons' films. "I have nothing good to say to him."

"I don't know what he's talking about," responded Mr. Simmons, citing a June 1983 issue of The Nilson Report in which his contribution to Diners Club was strongly praised. "To my face, he doesn't talk this way," he added, attributing Mr. Nilson's comments to "jealousy."

Mr. Simmons conceded that the title of his book is somewhat misleading and might confuse some about his agenda. "I didn't come up with that title; the publisher did - I just went along with it," said Mr. Simmons, noting that his original idea was "The Day That Cash Died."

"I am not anti-credit card by any stretch of the imagination," he continued. "It's the greatest invention since the wheel. I just think that banks have to use more judgment. They've rushed to do things that were motivated by greed.

"I've been through the corporate picture, and in public companies, profits often come first and good judgment second. If banks had used better judgment, credit cards would have grown even faster."

Mr. Simmons went into publishing and producing almost immediately after his exit from Diners Club. His first stage production was in New York City and led in 1978 to "Animal House," a movie spoof of college fraternity hijinks that retains a cult following. Mr. Simmons said he is hoping to produce a sequel to "Animal House," perhaps as early as next year.

"My greatest thrill was the opening night of 'Animal House,' " he said. "People went crazy over it. It was a huge, huge hit."

Summarizing his considerable success in varied endeavors, Mr. Simmons allowed that he is "pretty good at a lot of things.

"I'm not Ernest Hemingway or Steven Ross," he said, "but I like to think I'm a good writer and promoter."

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