For those in Connecticut who’ve been wondering about the history of consumer credit, a recently published article could shed a great deal of light on that topic. It may be hard to believe in the age of easy-access credit, but there was a time in American history when credit was extended from one party directly to the other, requiring a face-to-face transaction. In today’s world, credit cards are seemingly everywhere, and consumers can expect to never lay eyes on the people who process those accounts and bills. Learning more about the history of credit can also illuminate the need for debt relief.
According to the research behind this piece, industrialization brought about disposable income. That allowed consumers to handle installment plans, allowing them to purchase items on credit and pay their debt over time. The credit card itself was not introduced until 1958, when a bank manager came up with the idea.
The initial effort involved cards with $500 in available credit. Unfortunately, many of the people who signed up for those cards never paid their balance. A new attempt came in 1966, and this effort was marginally more successful.
In 1978, the Supreme Court ruled that banks could issue credit cards to people anywhere in the nation. Pretty soon, many families had at least one credit card, and the banks could raise interest rates. Some families relied on their credit cards to cover expenses between paychecks, and debt began to rise while savings fell.
By the 1990s, even people with poor credit histories were given access to credit. Only in 2009 did Congress take steps to protect consumers. As of this year, Americans have more than $1 trillion in credit card debt, and many are in serious need of debt relief. For those in Connecticut who fall into that category, working with a skilled bankruptcy attorney can help clarify debt relief options.
Source: theweek.com, “A brief history of credit cards“, Jessie Wright-Mendoza, Feb. 21, 2018
