Page 13 - Book1E

CHAPTER 2
A Brief History of Consumer Debt, Credit Cards, and Consumer Credit Counseling
Consumer Debt
It may surprise you to learn that the concept of purchasing on credit, or “buy now, pay later,” has been around in one form or another since the eighteenth century. It is reported that a furniture salesman in Philadelphia in the 1700s offered his customers the chance to furnish their homes immediately, while extending the time to make their pay- ments. Local grocery and variety stores
in the 1800s let their customers buy “on account” to prevent those customers from traveling to other towns for purchases.
In 1914, telegraph company Western
Union introduced a metal card for certain
privileged customers that allowed them
to have deferred, interest-free payments.
Department stores sold clothing in return for small weekly payments. Henry Ford realized that most people couldn’t purchase one of his automobiles all at once, and by 1930, car loans and financing were introduced to make cars more readily available to the public.
During the economic boom following World War II, the expanded industrial base created by the war effort produced more goods than many of our ancestors were willing or able to purchase or consume. Your grandparents may have used “The Easy Payment Plan,” a strategy introduced by marketing experts to advertise a low monthly payment
I’d rather go to bed without dinner than rise in debt.
—Benjamin Franklin
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