Credit Cards In Historic Times
And you thought the culture of credit that was eating away at the country’s roots was a recent phenomenon. I did so too. So imagine my surprise when I came across an astonishing piece of news: The origins of today’s credit culture date to the 1920s! That was the time when the trend of installment lending for cars and appliances (stoves, refrigerators, radios) began.
Even before that, people did buy on credit. But in those days, attitudes were different, and only irresponsible people were supposed to buy on credit. By the 1920s, it was only foolish families that didn’t buy on credit and use it while they were paying for it. And by the mid-1920s, 60 to 70 percent of cars were sold on one- to two-year loans. And by the time it was World War II, credit became part of the mass market. Washingtonpost.com reports:
In 1958 Bank of America introduced a credit card that in 1976 was renamed Visa. The combination of aggressive merchandising and government laws prohibiting racial and ethnic discrimination in lending led to a huge expansion of borrowers. One reaction to the anti-discrimination laws was the use of impersonalized, computer-driven credit scores to determine loan eligibility. Now U.S. businesses buy 10 billion FICO scores annually.
Read more: Unwinding the Credit Boom
Related posts:
- Too many credit cards may be harmful
- Is More Is good Theory True With Credit Cards?
- Getting to the Bottom of FICO
- Saving With Credit Cards
- Prevent Debt From Piling Up: Pay on Time