Modern finance · 1950s–1990s
1958
Credit cards for everyone
Bank of America mails 60,000 credit cards to Fresno, California, and revolving debt goes mainstream.
In September 1958 Bank of America mailed unsolicited BankAmericards to about 60,000 people in Fresno. Holders could carry a balance from month to month and pay interest on it, which became the model for the modern credit card.
Revolving credit made buying easier and debt far more common. Personal finance writers later offered two ways to climb out of several debts: pay the highest rate first (the avalanche) or the smallest balance first (the snowball).
💡 Why it made sense then
Banks earned interest on balances, and shoppers liked paying over time. The catch was the rate, which for cards has usually been far above what savings pay.
🎮 In Journey Shares
Your margin loan is the game's revolving debt: it charges interest every day it's open, and step 3 of the money plan is to pay it off.
Ideas it gave us
- 🧭 Debt avalanche and snowball
The avalanche and the snowball are two ways to pay off several debts. Both pay the minimum on everything; the avalanche sends extra money to the highest interest rate first, the snowball to the smallest balance first.
Practise with $10,000 in play money
Free. No real money involved.