Today’s WSJ has a supplement to celebrate the newspaper’s 130th anniversary. The section is filled with business coverage dating back to the Benjamin Harrison presidency (POTUS 23) until today. Coverage includes the 1911 anti-trust breakup of Standard Oil to, the 1929 stock market crash up until today’s news.
Here is today’s read. The date is November 5, 1959, and the WSJ announces the arrival of the U.S. credit card business to readers. Dwight D. Eisenhower was president; Richard Nixon was Vice President. Gasoline was 27 cents a gallon
- “Instant money.” “Ready credit.” “Insured ready cash.”
- Under such catchy titles as these, new consumer lending plans launched by many of the nation’s banks are spreading rapidly and scoring growing success.
- The new bank credit programs are designed to provide quick credit for qualified customers either through a credit card similar to those issued by Diners Club and American Express Co. or through credit that can be drawn on by check.
- These programs are a marked departure from traditional methods of bank consumer lending, which involve a careful review of every individual loan.
- “The revolving check credit romance is the hottest news item in consumer banking. The plans are sweeping the industry,” says a publication of the Federal Reserve Bank of Philadelphia.
This 60-year old news article hits it on the head with Bank of America’s comment.
- “We anticipate the credit card will be one of our most profitable services,” says an official of the Bank of America, which launched its own credit card program. “Other banks will follow us just have they have in other forms of lending.”
Today, the market is over $1 trillion. When this article was written…
- The American Bankers Association Installment Credit Commission estimates this type of credit may reach nearly $50 billion by the end of this year.
And as the radical product hit the U.S. market, the WSJ says:
- These plans are quite contrary to the concept of banking several decades ago and may be contrary to quite a few bankers today.
The WSJ got that right!
Overview by Brian Riley, Director, Credit Advisory Service at Mercator Advisory Group