While individuals’ need for instant gratification is partly to blame, it is only partly to blame. The credit card industry mushroomed in the ‘80’s for many reasons, among them the decision by retailers to stop servicing their own debt paper and assign it instead to the banks. Used to be, consumers could make major purchases by buying “on time” or “on layaway” directly from the merchant. No more. Once the banks controlled the debt, they introduced marketing into the mix to create the need. Seen the commercial where everyone’s using their card, having a great time, then someone stops the party and slows the line down by scrounging around for cash? Message: cash, old fashioned and slow; plastic, sleek and hip. Marketing and banks.
While individuals’ need for instant gratification is partly to blame, it is only partly to blame. The credit card industry mushroomed in the ‘80’s for many reasons, among them the decision by retailers to stop servicing their own debt paper and assign it instead to the banks. Used to be, consumers could make major purchases by buying “on time” or “on layaway” directly from the merchant. No more. Once the banks controlled the debt, they introduced marketing into the mix to create the need. Seen the commercial where everyone’s using their card, having a great time, then someone stops the party and slows the line down by scrounging around for cash? Message: cash, old fashioned and slow; plastic, sleek and hip. Marketing and banks.