Back in 1958, Bank of America invented a new device- the consumer credit card.  Called- whaddayathink?- the BankAmericard.  Over the next dozen years, it managed to get other banks to join in their offering.  And over those 12 years, these banks mass mailed credit cards to folks in zip codes they thought would make them money from the fees they charged for using credit.

It was one of those mass-mailed items that provided me with my first credit card back in 1967.  I’m not sure, but I think it had a credit limit of $ 500- which was more than enough to cover my needs.  (Bank in the 1960s and 1970s, most of us carried gasoline credit cards to use for filing our cars up with gas and for services from the local stations.)  I used that card for my theater tickets, dinners out, groceries, books…  I also paid the balance each and every month.

That’s why for most of us using cash is critical.  When we spend cash, the pain of buying is simultaneous felt with the pleasure of the purchase.  Spending cash is tactile- and is replete with mixed emotions.  Cashless purchases invoke a buffer between the pleasure of buying and the pain of paying.  But, in my case, I tracked all my purchases on the card.  Knowing full well both the credit limit- and the cash I should have at the end of the month to pay off the bill.  And, I didn’t (and don’t) spend beyond the (lower) limit of either.

That’s not true for most of us.  Many studies have demonstrated that when using a credit card, consumers lose track of what they spend, don’t truly weigh their purchases- often paying more than they should and effecting more purchases than are prudent, with less self-control.

Now, when I moved to Massachusetts, I changed all my banking relations (I was using local banks at the time) to State Street Bank.   And, I ordered a credit card from the bank and turned in the other one I had.  State Street granted me a liberal amount of credit and, since I paid the balance each and every month, I was rewarded with an augmented credit line.

All of that was well and good until my fellowship was terminated (now, there’s a great story) and I had to finish my theses in a heartbeat.  Back then, there weren’t personal computers- and the universities had strict protocols for appearance and submission (maybe they were written by Xerox, who ran University Microfilms, where all theses were filmed for sharing around the academic world).   Which meant I wasn’t permitted to type my own words- despite the fact that I could type about 100 wpm (or higher).  Nope, I had to employ an approved typist for my work.  (That was also the norm for theses submitted to Brooklyn Poly- but those costs were paid by my scholarship and part of the grant.)

Because I had a very tight schedule, I stopped commuting on weekends to New York City, where I had a lucrative catering career (basically weekends, 40 hours a week).  So, my financial status changed from being comfortably in the middle class to becoming penniless.  And, about the time I was submitting all my work, a wonderful woman (I can barely recall her name, so I won’t do it misjustice here) called me one night with the following query….

“Mr. Ackerman, this is Mrs.  XXXXXX from State Street Bank.  What are we going to do about your credit card balance?”

Being the wise-ass that I was (still am?), I responded along the lines “As long at it’s we- how about you pay half and I pay half”.  She didn’t find it quite as amusing as I did- but agreed to my offer to have the balance paid off in full within 90 days.  She told me my card would be frozen until then.   (Whew!  All the typing was done and the documents were submitted to my professors.  I could start working in New York again!)

Making a long, sad story short- I paid the balance off in under 60 days.  And, State Street upped my credit to $ 30,000.  (Keep in mind that was almost quadruple the average pay of an American at the time.)

I kept my State Street BankAmericard (it had become VISA in under four years) in force- despite moving to Michigan, Virginia, and California.  Up until I was going to remarry.   (To be honest, I was sad to say goodbye to such a stalwart friend, but my fiancé wanted our bills to be paid to more local firms.

(She also- without my permission- paid off my federally issued student loan that I had been husbanding from some 20+ years because the US Government had changed the terms during my schooling (but after my $ 3000 loan was issued which was used to buy my Ford Mustang [which cost $ 3070.06, I might add]).  When I took the loan out, I was promised that it would be forgiven if I taught for five years.  But, with all my schooling, that provision no longer applied by the time I was required to start paying it back.  So, I took the 40 year payment plan- which made my monthly payment under $ 10.   My wife (at the time) couldn’t believe that I would keep paying that trifle each and every month, using a stamp, since I only owed $ 84.22 in principal- so she mailed in that check.  [I had wanted the government to spend plenty of bucks processing my payment as punishment for changing the terms of my loan.])

The key point is ever since I owned a credit card, I spent less than $ 500 a year in cash.  Mostly, when I traveled overseas, where credit cards were less ubiquitous.  Don’t forget that coffee shops, donut shops, and fast food establishments didn’t take credit cards back then.  So, some cash was needed.  (Since the 2000’s, I spend less than $ 35 a year in cash-if that much.)

But, as you saw from my explanation of how I used my credit cards… I have been an aberration… until the pandemic hit.

Then, folks became fearful of spending money (they actually hoarded cash!)- it might spread the disease.  And, more often that not, food was being delivered, which required prepayment by credit card.  It’s why credit card use in 2020 increased by more than 10% over the previous year and some 65% of us make payment with credit/debit/other payment cards- a full 10% more of us than we did in 2015.    Of course while convenient, this method also means we save less- and may spend beyond our means.

(Hmm.  Is now the time to quote my favorite poet- e e cummings?   I'm living so far beyond my income that we may almost be said to be living apart...)

Please, don’t overspend your budget.  Pay the credit card off each month and avoid those ridiculously high finance fees.