50 years ago this month, nearly every home in Fresno, CA, received a small plastic card from Bank of America. For better or for worse, this "BankAmericard" introduced Americans to the concept of buying with credit. Unlike it predecessors, the Bank Americard did not require payment in full every month. A year after the Fresno Drop, that city's residents had spent almost $60 million in purchases. Later, this credit card would evolve into Visa.
What have we learned since the introduction of revolving credit? If personal debt hasn't taught us a most valuable lesson, we need only look to our government for proof that spending beyond one's means is a disastrous choice.
When used responsibly, credit cards can be beneficial. They get us out of emergency situations, they offer unparalleled purchase protection, and they pave the way for a good credit score. But anyone who views credit cards as free money (much like the 60,000 Fresno citizens who got those shiny new cards a half century ago) is in for a rude awakening when they open their first statement.
Today, there are more than 3.6 billion credit cards in use around the world. Credit has become a cornerstone of our culture, a perpetual love-hate relationship between lenders and cardholders. Let our current economic crisis serve as an example to future generations: limit your spending or face the consequences.
No comments:
Post a Comment