| As you know, I love history, but I appreciate many people don’t. |
| I am one of those people, so not sure where you are going with this. |
| Exactly. So, when you first wanted to talk to me about the history of credit cards, I should have known something was up. |
| Or, at least been curious. |
| How was I supposed to know it would make a difference in my life? |
| Why else would I want to give you a “history lesson”? |
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Black
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| I don’t know. But in my defense, my husband had just gotten fired, and I was freaking out about a million things, so wasn’t in the mood for a history lesson. And when it came to dealing with our credit cards, I just wanted to be told what to do. |
| I found it ironic since you always tell me understanding history is critical to understanding how we got to where we are today. |
| That’s in the context of world events, not my personal life. |
| The logic holds in both scenarios. That is why I insisted you learn about the history of credit cards. I knew it would help you. |
| Help? It ultimately made all the difference. Not only to me but also to the students we taught at KIPP Houston High School and the hundreds who attended our many student presentations. Not to mention countless adults because most of our speaking engagements include a segment on credit cards. |
| It all started in the 1920s with gas charge cards, which were marketed to traveling salesmen as a convenience so they would not have to carry cash. They were “charge” cards in that you charged your purchase and then paid in full at the end of the month. |
| When you first explained it, I didn’t think much about it until you asked me where, if I had a Shell card, I would most likely buy gas. |
| It was a very clever business angle. Gas cards soon led to general-purpose charge cards, like Diners Club and American Express, with the companies making money off the businesses accepting them. |
| Growing up, I remember Daddy having a Diner’s Club card. I found it interesting you could use a little plastic card to pay for a meal instead of money. It was like magic. |
| Then, in the late 1950s, Bank of America … note the word “bank” … issued the first “credit” card – meaning they were extending credit to the cardholder. And, charging interest if they carried a balance. |
| The first time you told me this, I thought it might come in handy if I found myself on a game show, but wondered what it had to do with my credit card debt. |
| In a word … everything. Although credit cards were marketed as a convenience to replace carrying cash or having to write a check, issuers knew they were so easy to use that many people would carry balances. And, they would make money off those people. Lots of money. |
| Easy is an understatement. But it certainly explained our mountain of credit card debt. |
| Would you have looked at them differently if they had been marketed as consumer debt or financial aid? |
| That sounds more like warning labels than something to make your life easier. |
| Exactly. Marketing at its best. Not only convenience, but they were selling “priceless” experiences. Except they carried a huge price tag if you did not have the money to pay the bill in full when it arrived. |
| When we taught at KIPP, that message didn’t sink in how I wanted it to. So, I told them to imagine getting dressed up, walking into a bank, and asking to speak to the loan officer. When asked the reason they wanted a loan, they’d respond with, “I saw a great pair of shoes at the mall and want to buy them” or maybe, “I want to go out with my friends to see the latest action blockbuster movie and then go to dinner.” |
| Yes, and they all started laughing. Until you told them that when they were old enough to have a credit card if they knew they did not have the money to pay the bill when it arrived, it would be no different than a bank loan, except the interest rate would be higher. |
| I even started calling credit cards “loan cards”, which definitely made an impact on them. When we tell that story at speaking engagements, I know it hits home for lots of men and women, even if they don’t want to admit it. |
| I bet many of them can relate to your initial reaction when I suggested you use credit cards as charge cards were first intended … “You mean pay off what you spend each month? Do people do that?” |
| For most of us “mere mortals,” it’s an interesting concept. And, although it may not always be realistic, it’s a new way of looking at credit cards. |
| Actually, it is a very old way. The original way. |
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April is Financial Literacy Month, so what better time to remember the history – and true purpose – of credit cards? Not as a line of credit or endless funds to buy things, simply as a convenience tool, nothing more.
Take a moment and imagine not being able to read this sentence. Now, think about this … if you’re reading this, you’re doing something millions of Americans can’t.
|
I’ll admit that I never realized how many people can’t read.
It’s something I’ve always taken for
granted. That’s until Black and I met
someone doing something about it – Jackie Aguilera, now the Project Manager for
the Mayor’s Office of Adult
Literacy (Houston). Her focus
wasn’t only on reading literacy but on “literacies” I’d never heard of, such as
financial literacy, health literacy, and digital literacy. But it all starts
with the ability to read. |
|
It
is called functional
literacy. Obviously, if you
are reading this article, you are on the internet. Which has more information than anyone can
possibly absorb (and is why news literacy is so critical). Now,
imagine if you could not read. All that
information … just sitting there.
Available to others, but not to you. |
|
Books are my great escape. Always have been. So, I can’t
imagine a life without them. |
|
A great escape … in many ways. You may use it to escape from the stresses of
daily life or just as entertainment. But,
books and, more specifically, the ability to read is how people can escape a
life of poverty and limited opportunities.
|
| Working with Jackie made me see that. As did our work with the criminal justice system, as so many incarcerated people struggle to read. And I know you’re a data geek, but please don’t start quoting me statistics. |
| OK, no statistics, but did you know that more people in the US are affected by low literacy (meaning they cannot read at a sixth-grade level) than are diagnosed with cancer or heart disease? |
Over the years, as we’ve learned how many people can’t read (including one in three Houstonians), it’s made us stop and think about how that impacts every aspect of their lives … their families … their communities. And also … our communities and our country.
As former First Lady Barbara Bush said many years ago,
If you help a person to read, then their opportunities in life will be endless.
| I have a confession to make, which I’m sure will make you roll your eyes. |
| Interesting caveat and probably true. |
| Every time we talk with Jackie (Aguilera) from the Mayor’s Office of Adult Literacy and hear what she’s doing in the world of adult education, I feel like I’m back in school and having to take copious notes. |
| I am more than happy to send you “homework assignments” as I come across relevant articles and research. |
| Thanks, but no thanks. I’ll stick to taking notes. But that does explain why you’re so knowledgeable about literacy. |
| But, reading information is very different from being at the forefront of literacy innovation. And, if we had never met Jackie, I never would have realized how literacy is about more than reading and writing. |
| But that alone is such a critical part of all of our lives and can make the difference between struggling and success. Although I never stopped to think about any of that before we met Jackie. |
| The funny thing is we first met her because of financial literacy. |
| Yes, I remember, even though it was over a decade ago. It was shortly after our book was approved as a financial literacy textbook by the (Texas) State Board of Education, and you decided we should go to a Houston Money Week meeting. I didn’t think we were qualified to talk about the topic. |
| I did not feel qualified to decide whether or not we could be of any help until I better understood what they did. |
| That’s why I let you do the talking when “newbies” had to introduce themselves. Plus, I’d have talked their ears off. But after the meeting, this confident but very approachable woman came striding across the room, extended her hand to me, and introduced herself. At the time, she was Literacy Coordinator at EastSide University. |
| All I remember was her energy, commitment, and passion for financial literacy. Not usually a topic discussed with such enthusiasm. |
| There’s an understatement. And not only did it take me by surprise, but I hate to admit it, it was contagious. Especially once we started working with her. |
| Another confession? |
| Maybe. I still shake my head in amazement at the incredibly creative ways she makes personal finance, typically such a “boring” topic, come alive. And how she uses outside-the-box approaches to making learning relevant. |
| But, it is not only financial literacy. It also includes digital literacy, health literacy, and even news literacy and environmental literacy. Which is why I am honored that she asked us to create various “Conversation Starters” she could use at presentations and workshops. |
| I never imagined they could be used to talk about serious concepts in a light-hearted and fun way. Even if she points out how I was a poster child for not being “literate” when it comes to an assortment of life topics. |
| I dislike the term “literacy” because it makes people feel like they are “illiterate” when they do not know something. In reality, they may never have been exposed to the information or given an opportunity to learn it. |
| I can tell you first-hand that, initially, I felt stupid until you pointed out I was merely sheltered. But that’s given me so much more empathy when I think of other people in the same position I was once in. |
| That is why she likes the “Conversation Starters” – they make the topics accessible in a non-threatening way. |
| And helps us realize that literacy impacts every aspect of our lives since it is so much more than reading and writing. Raising awareness of that and talking about it with others, especially our families, can have a huge ripple effect. |
| That is the purpose of September being designated National Literacy Month. |
| September seems the perfect time to learn something new. It’s like being back in school, except you can put the knowledge to work immediately. |
| And, this year, with elections just months away, it is the perfect time to learn about news literacy. |
| Oh, I know better … |