The last time I talked to my grandma, she started telling stories about raising eight kids on a factory worker’s income. With less than $20,000 a year, my grandparents traveled across the country, helped five kids through college and bought a vacation cottage. And they did it all without a credit card.

from “A History of Credit Cards”

Considering that she was raising a family during the 1950s and 60s, my grandma was in the minority when it came to credit card use at that time. The ease of using a single card to make all purchases led to the immense popularity of credit cards during this time.

The Decade of Rock & Roll, Social Revolution and Plastic

The idea of “paying with plastic” didn’t exist until the dawn of the 60s. Before 1959, the materials credit cards were made of ranged from metal to celluloid to cardboard. This evolution of materials also spawned the birth of modern consumer credit with the first revolving-credit card.

Bank of America introduced the first credit card that allowed you to make minimum payments in 1959. The card, which was originally introduced in California, became wildly popular and led to a number of other milestones in the credit card industry:

• 1965: Bank of America expanded the reach of its BankAmericard by using licensing agreements that allowed other banks to issue Bank of America credit cards.

• 1966: With the collaboration of 14 banks, the InterBank Card Association created a national credit card system to exchange information on credit card transactions.

• 1969: MasterCharge became an industry leader when it merged with another credit card, called the Everything Card.

By the end of the 1960s, three of today’s leading credit card providers had solidified their position in the industry. While American Express kept its name, MasterCharge eventually became MasterCard and BankAmericard became VISA.

50 Years Later…

The popularity of credit cards in the 1960s led to increased credit card spending every year in that decade. Unlike current credit cards, these had relatively high minimum payments, low credit limits and fairly low interest rates. This resulted in a simple system and few people with bad credit.

Today, very little about the credit card industry is simple. Cards range from the coveted Centurion Card (the black titanium American Express card) to starter credit cards for college students to credit cards for bad credit. Interest rates can be astonishingly high and hidden fees seem to catch even the most credit savvy off-guard.

Even though the popularity of credit cards took off in the 1960s, my grandma and grandpa didn’t get their first card until the 1980s when they started traveling internationally. By then, the novelty of minimum payments had worn off and the realities of debt had become more common.

By living within their means, however, my grandparents were able to avoid bad credit during a decade when credit cards seemed to hold all the answers in a rapidly growing material world.

Ellen S. is proficient in all things personal finance, and frequently writes about credit card offers and the road to financial freedom.

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