![]() ![]() On the other hand, the rise of powerful finance companies such as Beneficial Finance and Household Finance, was the direct result of this refusal by banks to make personal loans. For much of this century, many banks simply refused to make consumer loans widely available out of a belief that too much consumer credit was dangerous, and that people needed to be protected from themselves. The credit historian Lewis Mandell points out that in the early 1800s, many states, upon being granted statehood, passed a usury ceiling, rolling back interest rates, as their very first law. "Rather go to Bed supperless than rise in Debt," wrote Ben Franklin, and Americans have been echoing that sentiment ever since. At any given moment in our history, one can find ringing denunciations of consumer credit and "usurious" interest rates, calls for reform, worries that things have finally gotten out of hand. On the one hand, there is no aspect of personal finance more likely to inspire anxiety and even fear. Though this transformation wouldn't become apparent for another 20 years, and though it continues to this day, this is when the American middle class began to change the way it thought about, and dealt with, its money.ĬONSUMER CREDIT - that is the taking on of personal debt - has always occupied a peculiar place in the American psyche. Here was when a simple, ordered, highly regulated world began to evolve, for better or worse, into an immensely complicated universe. Here was the first inkling of the gradual but enormous changes in financial habits and assumptions of the middle class. Here began the trickle of what we now call "financial products," aimed largely at the middle class, that would become, by the 1980s, an avalanche. The precise date was Thursday, September 18, and if it marked the rise of the bank credit card in America, it also marked the beginning of something larger: the first stirring of what would become a full-scale financial revolution. ![]() Thirty years later, when most of us had developed feelings about credit cards that were nothing if not ambiguous, the bank even used the anniversary as the centerpiece of a marketing campaign. Like so many subsequent moments in the evolution of personal finance in America, it was years before the significance of that date became clear - years before Bank of America would celebrate its original BankAmericard as the first all-purpose credit card to take root when it would note with pride its history as the precursor to Visa, one of the two giant credit card systems when it would draw attention to its role in helping to make credit cards the most ubiquitious financial instrument since the check, an unambiquous commercial success story. But since we were still a good 25 years away from the time when the stock market would be among the daily concerns of the middle class, nobody paid much attention to it. The Dow Jones Industrial Average began the day at 524, in the midst of a decade-long bull market. The headlines that day centered around Communist shelling of Nationalist Chinese forces on the island of Quemoy the lead local story was about a proposed reorganization of Fresno's police and fire departments. The Fresno Bee managed to sandwich six paragraphs on the bank's new credit card program on an inside page between the business briefs and the livestock report. Because this was the first test of its BankAmericard program (as it was called), Bank of America purposely kept things low-key. ![]() ![]() Not that anybody made much of the drop back in 1958. It would always seem as though those first 100 million credit cards had simply fallen from the sky. Over the course of the next 12 years, before the practice of mass card mailings was outlawed, banks would blanket the country with 100 million credit cards of one sort or another, and it would always have that same feeling. It simply arrived one day, with no advance warning, as if dropped from the sky. There had been no outward yearning among the residents of Fresno for such a device, nor even the dimmest awareness that such a thing was in the works. That's a word they liked to use in the credit card business to characterize a mass mailing of cards - a "drop" - and it is an unwittingly apt description. America began to change on a mid-September day in 1958, when Bank of America dropped its first 60,000 credit cards on the unassuming city of Fresno, California. ![]()
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