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Credit Starts in America
Before 1920 banks didn't give out loans because they would have to charge sky-high interest rates, which was illegal back then. So loan sharks would lend money with high interest rates to people in desperate financial situations. -
Great depression
After World War l America went into a period called the "Roaring Twenties" where our economy boomed for around a decade. Banks were lending out money with no worries and people started building their credit debt. Then, in 1929 the stock market crashed and caused people to lose jobs and money. -
U.S. Enters World War ll
The U.S. entering World War ll was what helped get America out of the Great Depression. The war helped create many new jobs for the people who didn't have one. This brought the economy back up which allowed people to start building their credit again. -
Credit Cards
There was no such thing as a credit card before the 50s, it was always the loan sharks. Then in the late 50s Mastercard and other credit card companies started making credit cards. This brought the problem of credit card debt. -
Student Loans
In 1972, the first-ever federal student loan was given out. The loan was 1,000 dollars every year which started student loan debt. -
Attacks Cause Debt to Grow
During the 2000s, changes in government spending caused debt to grow again. After 9/11, debt grew rapidly due to people buying more homeland security.