Get Smart About Credit (GSAC) day falls, this year, on Thursday, Oct. 20. Basically, GSAC was developed by the Education Foundation within the American Bankers Association to reach out to educators and new consumers (or consumers-to-be), and help them understand the credit landscape. This year is the 9th annual Get Smart About Credit day.
What’s that got to do with a history site, you ask? Well, I figure I’ll give you a quick history of credit at Wells Fargo. (For an excellent history of credit in general, try this site.)
As with all things Wells Fargo, it began in 1852. Henry Wells and William Fargo established Wells Fargo and Company to provide financial services to pioneer merchants, miners and settlers in gold rush California. This you know.
This broadside ad from Wells Fargo bank that year points out the many services available, including “Money advanced on gold dust deposited for transmission or coinage.” That is, bring in some gold dust from your labors in the gold fields and Wells Fargo will pay in cash, depending on the market that day for bullion. Credit was extended from the very first.
Over time, credit got faster and more individual. Wells Fargo transferred money by telegraph beginning in 1864. Cash changed hands almost instantly, and the Bank assumed the risk as the money was transported between points.
In Des Moines, Jacob Levitt founded State Loan Company in 1897. Levitt was committed to making loans to working class customers. 50 years later, State Loan had become Dial Finance—fully 90% of loan applications were by telephone. (Via Norwest, Dial joined Wells Fargo in 1998.)
In 1945, post-war consumers were demanding appliances, automobiles and other material features of “the good life.” Wachovia Bank established a Time Payment Department to provide consumer installment credit for these purchases. In 1952, Northwestern National Bank in Minneapolis reported the number of installment loans were up 330% since 1945! Credit was becoming the preferred method of personal acquisition.
Credit was hot!
Credit cards, the innovation most recognizable today, was initiated by Wells Fargo in 1967. In partnership with three other banks, 2.5 million Master Charge cards were distributed to customers in California. Wachovia Bank used Master Charge a year later, as did Northwestern. (By then, Northwestern National had become Banco. Banco merged with Wells Fargo as part of Norwest in 1998, and Wachovia merged with Wells Fargo in 2008.)
Today, credit is a substantial portion of personal finance. But it can be tricky. With some fundamentals understood and in place, people can use credit wisely to help them succeed financially. That’s the idea behind Get Smart About Credit day.
Read up—Get Smart!