Credit cards 1970's

schoey123

I watched a programme the other night about the 1970's, and it was during this period that credit cards were introduced.

I thought about the impact this has had on society and how different it might be today had they not been introduced.

I think it's like most things in life, education, it's open to abuse but if you learn to manage it properly you can make it work to your advantage.

Thoughts ?

Candy53

I feel that mine will be the minority view, but I believe that the birth of credit cards were the worst thing that could have happened. Before credit everyone had to live within their means, and had to accept buying second hand and making or repairing things.

I say this from our bad experience from them and ending up in debt, going through hell for 10 years, debt ended in 2007.

We don't ever take out credit of any kind now. When I first saw the adverts for Payday loans, I cringed.

Candy

welshchocolatelover

Candy53 wrote: »

I feel that mine will be the minority view, but I believe that the birth of credit cards were the worst thing that could have happened. Before credit everyone had to live within their means, and had to accept buying second hand and making or repairing things.

I say this from our bad experience from them and ending up in debt, going through hell for 10 years, debt ended in 2007.

We don't ever take out credit of any kind now. When I first saw the adverts for Payday loans, I cringed.

Candy

I completely agree. I'm a 70s baby (born 1976) and the difference between my attitude to money/credit and my parents is astounding. To me, the norm is buy-now-pay-later, whereas they will always save. I'm trying to re-educate myself and my family!! By Sept our credit cards will be clear.

Gimpsdad

I slightly disagree, but only slightly. They caught on very quickly and are obviously here to stay. In the (good?) old days, relatively low limits were the order of the day and a minimum 5% repayment of the balance each month also. This meant thet the debts could be cleared in a reasonably short length of time. Given that the c/c issuer maybe only paid 95% of the purchase to the retailer it was a nice steady business with decent profits. Banks and finance houses, as is their wont, grew greedy though, and worked out that higher limits and lower monthly payments meant huge profits. £1,000 at a minimum 5% per month would have been £50 per month with maybe £10 as interest. Now, at 3%, 2% or even 1.5% per month meant lower payments, so for the same money you could double someones credit limit. Now though, you owe a lot more and a lot less is going on the capital, so interest (doubled now of course) can be charged for a much longer period. And why stop at 1 card? Why not bombard people with loads of different ones?

If the Government want to help people to avoid debt problems they should make a mandatory minimum payment on any card to be 5% again. It won't help those already in the mire, but it will help our children. Less debt will be run up, problems will be identified earlier, and periods of repayment where problems do arise will be significantly less. It won't be done though, as creditors are too powerful a lobby.

iolanthe07

I remember getting my first credit card (Access) in 1975 with a limit of £150 - which doesn't seem much now, but was back then. My wife went out and bought a new coat the same day. The difference then was that you had to pay back at least 5% of what was owing each month, and this stopped credit cards from getting out of control. Things started to wrong for people when these strict credit rules were relaxed.

System

schoey123 wrote: »

I watched a programme the other night about the 1970's, and it was during this period that credit cards were introduced.

I thought about the impact this has had on society and how different it might be today had they not been introduced.

I think it's like most things in life, education, it's open to abuse but if you learn to manage it properly you can make it work to your advantage.

Thoughts ?

I agree with education being the key. I think budgeting should be compulsory in schools. I am a 70s child and although my parents have never been in debt (apart from the mortgage) they did not drum into me quite hard enough about not spending on credit cards. Credit was handed out to me all too easily and I spent and spent. Sadly, I learned the hard way, but if someone had educated me a little better in my teens then I feel I may not have been so stupid and in my current predicament.

Red.

his_missus

welshchocolatelover wrote: »

I completely agree. I'm a 70s baby (born 1976) and the difference between my attitude to money/credit and my parents is astounding. To me, the norm is buy-now-pay-later, whereas they will always save. .

So true, the only reason my mum got a credit card last year was because she was going on a cruise where only credit cards were accepted on board. She struggled to get one too as she had no credit history because she always saves to buy rather than buy now pay later.

I wish I'd never got myself a credit card as I wouldn't be in debt now and maybe I would have learned to save/spend wisely. Then again, without my credit card to fall back on in emergencies, we wouldn't have afforded to get the car fixed the time it broke down, or get a new boiler when it bust at the beginning of that December... or would I have had money saved to pay for those emergencies if I didn't have a cc to rely on?

antonia1

I had no idea of the history of credit cards - thanks for the info.

I think that a minimum repayment of the balance was sensible, but I'm think the bigger concern is giving credit cards to people who have no hope of repaying. I got my first one given as part of my student bank account (ie I got money 3 times a year and didn't have a steady job). I assume that when they first arrived you actually had to have a decent wage to get one?

katejo

I am a 1960's baby and have always been a save first and then pay person. I got my first credit card in 1980 but was vey much conditioned by my parents to only spend what I had. I have always remained that way.

iolanthe07

would I have had money saved to pay for those emergencies if I didn't have a cc to rely on?

Yes. We all managed to cope with emergencies before credit cards were invented. We had savings, and if things were really dire you could normally get an overdraft on reasonable terms.

I assume that when they first arrived you actually had to have a decent wage to get one?

Yes. IIRC you had to have a decent wage and some history of running a bank account responsibly. They weren't issued to all and sundry.

his_missus

iolanthe07 - I hope to soon be in a position (well in a couple of years) where I will be able to save and buy. My downfall was that, when I was younger, my cc provider kept increasing my limit and I never considered how I would pay it off, it was like a "bonus" and I allowed it to encourage me to spend more and get into debt more. Such a stoooopid way to think!