Life Before Credit Cards

Credit Where Credit Is Due

As I was solidifying my family’s plan for Fourth of July, my mind gradually wandered from what to bring to my friend’s BBQ to headier thoughts like life, liberty and the pursuit of happiness.  After all, Independence Day is about celebrating our freedom, right?

Then I really got thinking: what does financial freedom really mean?  After all, wasn’t it those pesky taxation acts imposed by the King that led up to the American Revolution?  What would our founding fathers & mothers think of today’s financial abuses – in particular, the epidemic of credit card debt?

I was surprised to learn that the revolving, interest-bearing credit card is a very recent invention.  So, what did people do before plastic?

The History of Credit Cards

I remember when I was little, my parents had a ‘Master Charge’ – it was a charge card – NOT a revolving credit card – which meant you paid it off in full at month’s end.  How did the idea even start?

I did a little digging into the history of the credit card and came across the charming story of the father of modern day credit cards – a businessman named Frank McNamara. Frank was out at a business dinner in 1949 when he realized he had left his wallet in his other suit. He had to call his wife who ran over with it so he had the cash (yes – cash) to pay for dinner.  That night he devised a little idea so he would never be embarrassed like that again – and the Diner’s Club card was born!  Diner’s Club was developed for convenience sake – not so you could go out and charge a really expensive meal you could not otherwise afford! Sadly, we’ve gone way beyond Frank’s original intention today ….

How Did People Live Before Credit Cards?

So, what did people do before Frank’s invention? They mainly used cash, personal checks – and the layaway system.  But as modern conveniences became more accessible and people’s lives became more transient, people began to travel far from home more often – to places where their faces might not be recognized to take a personal check.  Because of this, the charge card gained even more popularity.  Not only was it a convenient option, it gave both vendors and consumers peace of mind.

Back in the day, luxury items were only affordable to, well, those who could actually afford it!  Talk to your parents or grandparents and they will tell you that air travel, big vacations and luxury cars were only for the rich – there is a reason luxuries are called luxuries.  If you wanted to take a trip or make a big purchase, you had to save up for it.  But as the credit card became more common in the 1960s and 70s, suddenly everyone could ‘afford’ these items, and they became mass market goods…at least on the surface.woman-overloading-with-shopping-bag

How Much Credit Card Debt Do You Have?

Lurking under the surface of everyone you see driving an expensive car they can’t really afford – or wearing clothes that cost more than a month’s rent – is likely a nasty habit of credit card debt.  According to, of Americans who have credit card debt, the average debt per household is over $15,000!

Ben Franklin, the superstar of Founding Fathers, once said “It is easier to prevent bad habits than to break them.  And rather go to bed without dinner than to rise in debt”.  So, this Independence Day,  take a moment to think about your own financial independence, and what you can do to improve the state of your money matters.  By the time the next Fourth of July rolls around, you might have your own personal financial freedom to celebrate!

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3 Responses to “Life Before Credit Cards”

  1. Maddi says:

    We definitely are prisoners to our credit cards!

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  3. Rose says:

    Keep it coming, writers, this is good stuff.

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