A history of the early american consumer

Colonial economy to s[ edit ] Shipping scene in Salem, Massachusetts, a shipping hub, in the s The colonial economy differed significantly from that of most other regions in that land and natural resources were abundant in America but labor was scarce.

A history of the early american consumer

American History USA

The first modern credit card was only established inand it is only since that the usage of them has taken off. The result was a social revolution away from saving, and in favor of spending. Long stigmatized as a sign of impulsiveness and weak character, consumer debt became an accepted part of financial management.

This has been a huge source of profits for the financial industry, and a source of increased purchasing power for the consumer. However, most consumers have been remarkably unwary about the downsides of credit card debt.

Credit before credit cards The idea of using credit to purchase goods is nothing new by any means. However, there was no widespread system in place to regulate this credit in the early United States.

Throughout the 18th and 19th century, credit was almost always granted on a store-by-store basis. One's personal reputation and relationship with a proprietor was the primary basis for any credit granted. At its best, this system allowed farmers and businessmen to purchase essentials while they waited for the harvest or accounts receivable.

The threat of receiving no credit in a subsequent year was more than enough to ensure payment when an influx of cash was received. In its more insidious form, store credit was given out as a means of entrapment. Company stores in mining towns made sure that a gap naturally existed between the cost of their products, and the wages that they paid out.

The same practice proliferated throughout the South, at those stores where sharecroppers were required to shop. The objective was to depress wages and decrease turnover. If an indebted worker tried to flee, they could be subject to arrest.

The rocky beginnings of the credit card industry In modern times, the credit card has been created to fill the need of deferred payment for consumer goods. As with many things, the locale of innovation was California.

A history of the early american consumer

It was in this state that the BankAmericard was introduced in The cards could be used at a variety of stores throughout the state. The unsolicited sending of fully active credit cards became a common marketing tactic.

Unfortunately for the card companies, it greatly backfired in what was labeled "The Chicago Debacle". In advance of the Christmas holiday, a number of companies attempted to make their move into the Chicago market, using the standard practice of mailing pre-approved, functioning cards as their solicitation.

Unfortunately, members of organized crime caught wind of these campaigns, and they used corrupt employees in the Postal Service to intercept thousands of cards. Outraged people throughout the Chicago area began receiving bills for accounts that they had never heard of.

It was one of the first cases of large-scale identity theft in the United States. The resulting Congressional Hearings placed a lot of negative press on the fledgling industry, and the practice of mailing pre-approved cards through the mail was ended.

National standards for consumer credit By the s, the credit card infrastructure had been moved online, and the system had been largely nationalized. The familiar providers -- Visa, Mastercard, and American Express -- had also established themselves as national brands.

However, there was still a huge regulatory impediment to the industry. Credit card companies were hamstrung by state usury laws. The Supreme Court changed this situation with their decision in Marquette Nat.

Bank of Minneapolis v. First of Omaha Service Corp. This ruling allowed credit card companies to charge the interest rate of the state they were located in, rather than the state that their customers were located in. Effectively, the least regulated state in the nation became the benchmark for everyone.

The Postwar Booms

Citibank was the first to take advantage. Inthey moved their credit card operations from New York to South Dakota, where there was no limit on interest rates at all. Other banks quickly followed suit, and a truly national credit card industry was born.

An explosion in consumer debt: After the recession ended, the inflation rate plummeted. Card companies discovered that they could keep their rates at the same levels, however, without a decrease in business. As usage expanded and balances increased, what had previously been a loss leader turned into the most profitable part of many banks' portfolios.

Decline in personal savings rate Increase in advertising, start of cable, etc.In the eighteenth century, many American colonists enjoyed imported British consumer products such as porcelain, furniture, and musical instruments, but also worried about dependence on imported manufactured goods.

Including videos. outstanding photography & artwork. a history of the early american consumer a country in North America Native Americans have lived there for thousands of years From the writings of antiquity to the innovations that fueled the modern debt boom.

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History of American Consumerism