Credit cards, a history following the rise and fall of consumerism

Consumer culture finds its pinnacle in credit cards. Booming with the consumerism of the 1950s and spreading throughout the rest of the century, credit cards represent the wild spending that proliferates still today -- in wide use by everyone, from teenagers to the elderly alike. 

The plastic rectangles, finding their roots in lending programs for retail in the first half of the century, were first produced on a statewide basis by Bank of America with California's BankAmericard. The program revolutionized credit systems. While consumers had felt that credit cards lacked use due to the lack of acceptance by most retailers, the BankAmericard found businesses willing to use its program in Fresno, after 60,000 citizens received the product. 

It looked like a disaster at first -- according to Timothy Wolters in Enterprise & Society, fraud was rampant, and "the percentage of delinquent accounts was five times as large as expected." Within a year, the head of the credit card program resigned. 

Yet, as evident today, Bank of America's credit card program didn't end there. After a massive $3 million advertising program, the program finally became popular in the 60s as more retailers bought into the system. In 1976, the VISA program was established. Cardholders were charged an annual fee, and participating merchants had a service charge -- taxes levied for the mass production of the credit card system US-wide. The VISA, along with competitors, joined in association to the encompassing MasterCard.

Credit cards, however, still found it difficult to garner credibility. At first, they were mass-produced for those thought to lack credit reliability -- drunkards, gamblers, etc. President Johnson's Special Assistant Betty Furness said they were like "giving sugar to diabetics," and the mass unsolicited dropping of credit cards into mail boxes spread the system into chaos.  Even more, the credit card system was massively more complex at that time. Transactions required merchants to call the bank, who called the credit card program, who had to change the specific consumer's credit balance. Until computerization in 1973, and until unsolicited card dropping was outlawed, the credit card found it hard to garner reputation. 

The credit card finally established itself in the 70s and on. Fraud began to decrease, and profits came in, with over 100 million cards around the US. In the 80s and 90s, the number of cards doubled, and spending increased five-fold. 

With mass use came panics. In 1991, "the Big Scare" hit cards as politicians talked about lowering credit card rates -- spiking fear in the card industry, and causing huge speculation among economists of bank failure. As the situation cooled, economists and technologists found new ways to secure the system. New credit scores and credit strategies with different rates proliferated -- creating new ways to provide credit cards with less risk. 

Today, the credit card is still everywhere, and it seems to be here to stay. While clear links lie between credit card usage and the 2008 crash, and new laws passed in the 21st century to secure this practice showing cracks in its reliability, it's hard to find any retailer in the modern world that doesn't use the rectangular, plastic square.