The history of cash part 4
Credit cards, debit cards and cheques
Not so long ago, it was relatively difficult to open an account with one of the clearing banks, and the Mainwarings and Wilsons who ran the institutions long catered principally to the professional classes, discussing their affairs over a glass of Amontillado in the manager’s office.
Though bounders could be relied upon to write bouncing cheques, for most of the 20th century the possession of a current account denoted respectability. The manual working classes relied on a little brown envelope of notes and coins at the end of the week, and remained “unbanked” until well into the 1970s. If they wanted to send money away they relied on the postal order, now almost extinct.
Then we all became more prosperous, the banks discovered marketing (black horses running across the landscape) and students were being offered railcards and book tokens (another quaint form of money, happily still with us) just so that the bank could enjoy the mixed pleasure of them running up enormous overdrafts.
In the 1980s, National Westminster Bank even raised eyebrows by allowing the customers the option of “pictorial” cheque-books, featuring images of badgers and bunny rabbits. Cheque use peaked in 1990, with 2.7 billion passing through the system; it’s about one-third of that level now, and falling.
The reason is the debit card, a sort of cheque guarantee card without the cheque. The first Switch card transaction took place in 1988; by 1995, they had overtaken credit cards in popularity, and cheques fell behind them in 1998. The advent of “chip and PIN” greatly reduced the scope for fraud. Last year, each debit-card holder used their cards 166 times on average, acquiring £3,848 in “cashback” and making purchases worth £4,799.
However, British consumers were not to be constrained by such trivial considerations as how much money they had in the bank. The launch of the Barclaycard in 1966 (and its now defunct but long-running rival Access in 1972) was the start of “plastic” – the discovery that a small rectangle of polyvinylchloride (always measuring 85.60 by 53.98mm) could transform your life. Until, that is, the astronomical APR (annual percentage rate of interest) and overlenient credit limits led to the inevitable personal mini credit crunch.
The modern British addiction to debt can be traced back precisely to the advent of the credit card. By the 1990s, 0 per cent cards were being offered to lure customers, and those who took advantage of the initial free offers and then transferred the balance to the next free offer when the interest became due were known as “rate tarts”.
Our “flexible friend” (as the Access card marketing line went) had a nasty habit of landing us in economic trouble; now that he’s been allowed to make the acquaintance of the “sub prime” community in the United States and Britain, the extent of the credit card’s true perniciousness is becoming apparent. At any rate, we save less than at any time since the 1950s; the teenager of today is far more likely to have plastic than a building society book.
