I remember when I was a kid, before credit cards....

[WCGreen]

People thought it was a good thing to put a little money down and pay a little bit every week or so to get something they really wanted or needed...

They also had these special accounts at banks called a Christmas Club so you could put a little bit of money aside each week or so so that you would have enough money to pay for Christmas when the Holiday came, you would have enough money...

The department stores started to give charge cards to their best customers so the idea of lay away was left to fall away. It was better, they thought, to charge a little interest, sweeten up the bottom line, if you will, instead of collecting money up front.

And the banks, well they scrapped the whole idea of a Christmas Club since they make more money charging interest, a whole lot of interest, it turns out, by issuing these things called credit cards. Suddenly, collecting a few bucks each week from thrifty people was seen as non-profitable and so five minutes ago.

Where did we go wrong?

The greatest generation, my parents generation, would put a little money aside, wait to get what they wanted, work for some future goal.

Now kids, and a lot of their parents it seems, don't even consider putting money aside for college willing to live life as the perfect consumer spending every dollar they make and obligating themselves to their future earnings for stuff such as down payments for a house, a college education.

Look I did the same thing. I always figured I would make enough money in the future to pay off all my obligations that I was making in the here and now.

Then stuff started to happen. I started to show signs of a devastating respiratory illness, one that would ultimately end up with a easy way to disability and now a place on a lung transplant list.

Suddenly the future didn't seem so bright. More downturns and the spiral that started slow and suddenly was headed down the fast bobsled ride at Vancouver.

Well, the more things change the more things remain the same.

The generation before the Greatest, the ones who were responsible for keeping families together as best they could during the Great Depression, laid the groundwork saving for the future instead of spending against that future. Now the children of the roaring 90's and 00's are left with a new understanding as to what excessive dept can do to families, to the country...

Here is hoping the people who come after us learn the lesson that we failed to understand that no matter how rosy the future may look, there is always, always a surprise waiting around the corner...


Adding on edit. I am not against student loans just as I am not against credit cards. It's just that people get both far too easily and are not considering what may happen of things go wrong.

[DesertFlower]

1. i started a xmas club when i was very

young. 50 cents a week. got $25.00 around xmas.

when i got a little older i bought things using the lay away plan.

[DJ13]

2. We used to get personal credit lines to buy big ticket items

We would see a major appliance, get a quote from the store, then go to a loan office downtown and take out an unsecured loan to buy it.

Slightly higher rates, but the rates were set in stone, and the balance went down every month.

[marshall]

3. It horrifies me to see how young people are racking up debt

And for fancy cars, clothing, electronic gadgets, etc. I've seen college kids with nearly a hundred thousand dollars in student loan debt for a liberal arts degree that has no realistic hope of garnering them a job with a salary big enough to warrant that. And these folks are talking about trying to get all their student loans paid off before retirement. It just boggles the mind.

[proteus_lives]

14. I have friends like that.

Boggles my mind too. They'll be working those debts forever.

[qazplm]

4. then again

I needed credit cards just to eat in law school. Maxed em out too. I bought a cheap computer, but other than that, no other niceties.

These days, credit cards often are used not for extras but for necessities.

[WCGreen]

7. Credit cards and loans are a tool, a part of your financial life...

my problem is that a lot of people don't even consider saving and delaying gratification.

[REP]

5. My FULL credit card bill is part of my monthly budget

Using a card is convenient and I budget to pay it in full, every month, even when shit happens. Financial planning can be learned.

[DesertFlower]

41. that's what we do. nt

[CaliforniaPeggy]

6. Bank of America was one of the first to have a credit card.

How long ago that was!

I was just a kid myself then, and I never understood the hoopla...

For sure there are always surprises......and often they are not what we'd hoped they would be...but what we feared.

Perhaps the next generation will see the pendulum of better choices come back with a roar. I know my kids are busy saving, so maybe there's hope...

K&R

[DesertFlower]

22. i thought it was citibank.

i had a checking account with them. in 1967 they sent me the "everything card" which later changed its name. eventually it became visa.

they sent me 2. my ex husband came over to get our son and saw the cards. he said "give me one". did he think i was crazy? lol

[CaliforniaPeggy]

25. I think Citibank came later...

I'm remembering the late 50's or the early 60's...

BankAmericard was the name of their card way back when...

IIRC!

[DesertFlower]

27. you're right. i do remember that .

[CaliforniaPeggy]

29. I just Googled the history of credit cards; here it is...

Very interesting!

http://www.creditcards.com/credit-card-news/credit-cards-history-1264.php

There's more to that history than I ever realized!

[DesertFlower]

31. thanks peggy. nt

[cherokeeprogressive]

8. My mom used to make the rounds between the layaway depts at Sears, JCP, Monkey Wards,

and a few other stores. Back then, in the sixties, I had no idea that she was paying for Christmas presents for my little sister and me.

I'm afraid that we'll never be able to go back to times like that.

For instance, we were a one-car family in So. Cal. and both of my parents worked full time. I remember sleeping in the back seat of the car at 5:30 in the morning while my mom drove my dad to work. Today, a family like ours would probably hock everything for that second car. My dad actually bought the second car when I was about ten, and he bought it for a hundred bucks. That's all he was prepared to spend and he waited until he found the right car.

[proud patriot]

9. Kmart just brought LAY-Away back !

[WCGreen]

10. I know...

It's really a good thing...

[Warpy]

18. Layaway is so much more sensible

because you have to pay it off to get your stuff. You can't just get your stuff and put off paying the bills, paying some laughable minimum every month and still owing most of what you borrowed by the time whatever it is wears out or breaks down. Layaway puts it on reserve until you pay the balance itself down.

I was more than a little disgusted when they ended it. I remember using it back in the 60s and early 70s when I didn't want to save up and risk that something I wanted was sold out. It was particularly useful for things like winter coats that would arrive in August and I'd have paid for by the end of October, when it was cold enough to wear one.

I've always been a saver and I got rid of credit cards in 1991 when they started to charge junk fees and look for minimum payments. I saw the scam as it started.

Yes, I regret all the European vacations I never took along with being able to dress for success instead of thrift shop failure. However, I don't regret the paid off house and being able to sleep at night, undisturbed by the worry that next month there won't be enough money to cover all the debts.

[Hannah Bell]

37. so did sears (which owns kmart). & there's a reason.

[OffWithTheirHeads]

11. If you remember those days then you also remeber

When you could write off your credit card interest. After all, it was it was income to them but an expense to you. Thank you Ron Reagan for giving us this tax break takaway!

When you could write off the interest on your car loan. After all, it was income to them but an expense to you. Thank you Ron Reagan for giving us this tax break takeaway!

God bless Ron Reagan for cutting our taxes and balancing the budget. Oh wait! He raised taxes and blew the budget? Who knew?

[WCGreen]

13. I remember doing tax returns that allowed those plus an equation

to figure out how much you could deduct for sales tax as well...

[DesertFlower]

26. i remember that too. you could also

write off your sales tax.

[tammywammy]

34. That must depend on the state

I write off my sales tax each year, but Texas doesn't have a state income tax. I thought state income taxes were deductible? Also if I remember correctly we couldn't write off the sales tax until a few years ago.

edited to add: Oh I see, you can deduct either your state income tax or sales tax. It just came around in 2005 that we could deduct our sales tax.

[DesertFlower]

38. we deduct our state tax, but

back before reagan you could do both. i'm in arizona, but it was the same in new york, where we not only had state tax, but city tax.

we also deduct our real estate taxes and the taxes we pay to register our cars every year.

[proteus_lives]

12. Credit cards ruin people.

I'm always amazed when people my age open their wallets and have 4-6 cards. I have one and that's enough. I've never missed a payment and I often go months without using it.

My dad was and is old-school. He pounded several simple rules about money and credit.

1. Never put anything on credit if you don't have the money to pay for it.

2. Credit is money, you have to pay it. It doesn't go away.

3. No debt. If you don't owe anyone then less money isn't a problem.

4. Bargain hunt and shop around. Become a loyal customer at different places for good deals and so people won't screw you.

5. Don't focus on making money. Focus on finding a career where you're happy. (That's a hard one. I'm always looking for more work and sometimes I wish I had chosen a different path. My happiness with my life always wars with my wish for more stability.)

I don't make a lot of money but I do ok. I put away money at every opportunity because I don't know what tomorrow may bring. I don't assume I'll be making more money in 5 years.

I liked your post. My sisters did the same thing and they paid for it. They should paid more attention to what the old man said. Credit card debt haunts them to this day.

[Doremus]

15. Sears has a Christmas club. nt

[leftstreet]

16. Don't blame the workers. Wages have been stagnating since the 70s

The US has been dismantling the few mechanisms in place for spreading wealth since the 70s.

American workers have lost major ground since the mini-middle class surge you speak of

[Newest Reality]

17. This is probably old hat, but ...

The increase of use and availability of credit cards coincides with the flatness of wages over the period since them became more widely available. In other words, they provided a compensation for lost spending power. How nice to have that extra money to be a good consumer, not based on your wages, but from a tentacle of the machine earning astronomical interest on your consumer subsidy.

Oh sure, we can beat ourselves collectively on the heads by thinking the collective we have abused credit cards based on our greedy little lack of merit and discipline, but should we not take the influence of bankers, media, culture, etc., and their motivations into consideration regarding the shifts in personal, financial perspective?

I have gathered from the posts that some of the good old sound advice being professed here is based on practical and sensible advice based in a reasonable reality where sensible budgeting and a fair system are both considered.

What I would like to point out is that money, credit, interest, value, debt, and other financial ideas are not actually real in the concrete sense, (like a stubbed toe, a whack in the head, or an empty stomach). Yet, they have become so ingrained in the minds of people utilizing these instruments day-to day that they are referred to "as if". When we forget that we have tied our sense of fair play and responsibility to what amounts to nothing more than a highly abstract social contract and terms of agreement that is represented by various social instruments to act in the stead of those social contracts, (cash, coin, papers, bonds, titles, etc.) we fall into a terribly distorted perspective that tends to favor the cabals and institutions that control, direct, and profit from the symbolic means of exchange.

You don't have to do much research to see this. The Wiemar Republic, Argentina, and the various other countries and situations where the abstract construct of symbolic exchanged changed rapidly and even failed. To me, the problem is that we find ourselves so invested, (mentally, physically, and often spiritually) in the pragmatism of the ingrained facade that we are unable to pull back when the fiction of it fails for various reasons, (usually heavy manipulation and malfeasance by the heavy-handed, top players of the game). We could, collectively call the game at any point and declare a Jubilee. That's an option in other situations where something has failed or broken down so much that scrapping it and starting over is the most viable solution.

Too many people have too much invested in the fiction to call the game and level the playing field. However, I am not saying that the people now find themselves used and abused and less enamored and captivated by the facade of representational, by-proxy value would not be open and interested in scrapping the mess that has been made. Yet, even if they did realize how little left they had to lose and started to become more agnostic about the value of symbolic wealth in its many forms and formats, they would quickly come up against those who have much to lose in the process of resetting a totally failing system of make believe.

So, I cannot blame those who have had to function as "consumers", (what a bovine-like replacement for the term citizen) students, and workers who tried to play along with the scorecard presented by those pretending to be anything other than exploitative and manipulative under the guise of being so-called respected members of the leadership/business community, (read corporate cannibals or Syndicate/Mafioso waxing as legit) politicians, bankers, elite, wealthy, etc. We have tried to adapt and do things right, and at every turn, we find a placard that says, bold letters, "You are screwed!"

Whoever is taking liberal arts classes on a student loan may or may not know that both the education they get and the money they will owe my be totally worthless, but they are spending valuable time doing something, at least, for now ... which is where many of us are. We won't worry about the game being played, but we will be taking it seriously less and less and declaring our own Jubilee's to various degrees, one by one, because we know that's where it has to go, one way or another.

[leftstreet]

20. +1

:thumbsup:

Welcome to DU!

[Newest Reality]

23. Thanks ...

For the warm welcome.

It is a true pleasure to be here.

[WCGreen]

40. If you really took notice, i pointed out that it was the banks

and the department stores that replaced layaway and Christmas Clubs with credit cards...

I get your point about replacing increasing wages with easy credit but perhaps they were more symbiotic than mutually exclusive.

I don't think you could have one without the other...

[Newest Reality]

43. No, I saw your point.

and thanks for making it. Symbiotic is a way to but it, but that's a matter of perspective, IMHO. I tend to think of the relationship as parasitic, though, based on the observable outcomes of the exchange. Our intestinal flora benefit as much as we do from our relationship, however, I don't see how we have benefited from our symbiotic relationship with capitalism-at-large in that respect ... well, other than in the official way that we have been told we should appreciate what they have and are doing for us in this relationship. It seems to me that we are currently finding out that our relationship to the big mosquito had no real advantage to us and that tape worm was lying when it said that we would lose weight and not become malnourished int he precess.

Actually, the whole credit vs. flat wages is well documented and I don't have the time or inclination to reiterate it. It is factual and I might suggest more study into the matter to see just how orchestrated and profitable it has been. It is not just a statistic or anomaly, but believe or think as you feel it is best to do so.

I really just express my own opinions, be they informed, surreal, or totally imaginary. I would expect others to accept them deny them, or discard them as they seem fit. The rest will use them as an inspiration to do any homework necessary to substantiate any claims -- which is my point. After all, their is no excuse when you can scour the Internet and find out what you care to while considering the source as you proceed, ey?

Agree? Disagree? Sure? But was there a point to our interaction? Maybe survival and common good would be interesting criteria to consider so that our hot air and the energy expended do not go totally to waste ;) In strange times, strange thinking might not only prevail, but it very well could be our ticket to resolutions we never even expected on this long, strange trip we share.

[upi402]

19. Why you hate 'merica?

just kidding. I agree 100%, we fail to learn from history to our own detriment.

[Mind_your_head]

21. Lay-a-way plans didn't charge interest.

CHARGING INTEREST (usury).....that's where is ALL gets unethical....all goes wrong....unsavory.

Most great kings, saints, explorers, et al....have 'considered' the effects/consequences of usury.

I'm most certainly not a scholar or an expert....but I hope modern day ppl will read/consider what some great minds in our past had to say about usury.

[Hannah Bell]

28. yeah, but they got to "borrow" your money for free & invest it at interest.

same difference, really. in the new way of things, though, they don't need to maintain as much stock. they just give you the item.

[Mind_your_head]

35. Oh Hannah........

[Hannah Bell]

36. yes? i lived during layaway. you got to pay them every month & get nothing.

if you missed x amount of payments, they got to keep your money.

meantime, they got to "hold" (invest) everyone's money until they paid off the lawaways. it wasn't a "sale," you see, until fully paid.

[DesertFlower]

24. when i married my first husband in 1960 sometimes

we ran out of money for food a few days before pay day.

we had a little grocery store around the corner. i, and many of the people in my neighborhood would buy what we needed and say "mike, put in in the book". when pay day came we paid him what we owed. of course, his prices were higher than the big grocery stores, but we were able to eat.

i miss the "mom and pop" stores.

[Mind_your_head]

32. His prices were higher, but you sure didn't pay 38% or higher.....

Which is what credit card companies are assessing right now, I hear. (I'm not a CC "player"....haven't been for a long time. CC companies are just raping their cardholders into "non-exhistance" (good luck with that, you bitches/bastards!)

[DesertFlower]

39. his prices were just a few cents more.

we have a discover card and a visa. there's no annual fee and we get 1% cash back. we don't pay interest. we pay the whole amount every month. it's more convenient than paying cash.

[Mind_your_head]

42. SOMEBODY is paying that 1% cash back......

:think:

[LeftyMom]

45. Other consumers.

Credit card companies charge merchants fees for each transaction. Generally the fees are built into the cost of an item, because the credit card companies also have rules for merchants which forbid pricing items differently for credit transactions, such as when gas stations used to advertise one price for cash and another for credit purchases of gas. So when you buy a widget, the price is based on what's profitable after paying the credit card company their cut for the transaction, and if you're one of those infrequent customers who actually pays in cash, you're probably paying a little more for your item than you would if your fellow shoppers followed your lead.

Debit transactions (pin-code based ATM transactions) also have a merchant fee, but it's a flat charge rather than a percentage and generally hovers around $0.50, so if you have the option running your transaction as a debit rather than credit will save your merchant money and keep costs down for the most part. Merchants are generally permitted by the banks to pass these fees along, and small businesses often do, especially on small transactions.

[Kievan Rus]

30. This was before our acute addiction to cheap plastic crap

[Kat45]

33. My bank still has a Christmas Club.

It's a community bank. They also still have a program with the town's school system where they start kids with savings accounts in elementary school. The kids will bring in money each week (or month, I forget) and someone will bring it to the bank to deposit into their accounts. It's a good way to get kids in the habit of saving and teach them about savings accounts. I still have my bank account that I started in elementary school at this same bank.

[LeftyMom]

44. So does my credit union.

[Zoeisright]

46. Back then people HAD a little extra money to put aside.

What a dumb post. Back then more people were paid living wages. Most people in credit card debt have poor jobs, or huge medical bills.

Grow up.

[WCGreen]

48. Yea, what a dumb post....

Any post that doesn't conform to my little view of the world is s dumb post...

I know what you mean...

[Raine]

47. My mother would put money into the Christmas Club account

at the bank during the year and so for Christmas the money was already there for gifts. When credit cards got to be the thing she took them up instead of using the Christmas Club and after that she was always running a debt. I remember all the fights between her and my father because she would hide the bills so he wouldn't know how indebt she was ... not pleasant to remember. :-(