Inspired by the hit TV series, "Mad Men," to revive the three
martini lunch? Some ways of life in the mid-century were definitely
healthier than others. A major difference is the way Americans
borrowed. Here's how the era was better for consumers and why some
of the past is better left on the small screen.
Cool in the 1960s
Don Draper and his real life counterparts may have suffered
frequent hangovers, but their financial and banking habits were
probably sober and sound. If you were a typical adult at that
You knew your bank president.
"There were more community banks," says Robert D. Manning, author
of "Credit Card Nation" and consumer credit and debt expert. "You
also knew your local bank president and had a strong personal
relationship with him." Therefore, he says, when you went for a
car loan, you were talking to someone familiar and could appeal
to that person as an individual. You weren't reduced to a mere
You weren't in credit card debt.
Sure, you would have looked like a million bucks in your slim
suit or swank shift, but you probably paid for it with cash. In
1965, only 5 million credit cards were in circulation. Your
attitude about owing was different, too. "The debt addiction
hadn't yet taken hold," says Kristen Hagopian, host of the radio
talk show, "Brilliant Frugal Living." "That generation was that
much closer or perhaps even raised in the Depression era, where
too much unpaid debt combined with a lost job often resulted in
losing your house, your family, your confidence." Hence, thrift
was still the norm.
Stores offered free or cheap loans.
This doesn't mean the ability to borrow didn't exist. When
shopping on Main Street, you just might have had a buy now, pay
later option. According to Manning, local merchants tended to
give "off the book" loans because it reinforced customer loyalty.
Many didn't charge interest, either, but if they did, it was
around 1 percent to 1.5 percent per month -- just enough to cover
the extra bookkeeping expenses. Also, you could and would pay the
tab in full, since the loans were small and paying incrementally
was rarely an option.
Saving was expected and creative
. Without the "charge it" mindset yet in full swing, you'd have
saved for what you wanted. S&H Green Stamps, which grocery
stores and gas stations gave customers after a purchase, hit
their popularity peak in the mid-60s. You would have pasted them
in books, and after collecting enough, redeemed them for
everything from household necessities to luxuries. Almost all
banks offered such short-term savings accounts as Christmas
clubs, too, and with them you'd be sure to sock away enough to
buy Junior his Red Ryder BB gun.
Cold in the 1960s
Not all aspects of personal finance was rosy for our stylish '60s
citizens. Modern Americans would be just as appalled by the
following as they would by a pregnant, chain-smoking Francine
Hanson. For example:
Secretive credit reporting.
While credit reports existed before 1970, only businesses would
have been able to access them. "Credit reports were not available
to consumers, and they tended to have more intimately personal
information in them," says Mark Hankins, author of "Debt Hope:
Down and Dirty Survival Strategies." The system was also more
local, less regulated and errors were rampant. If you applied for
a loan, you could have been unfairly turned down. Not only would
you never know that it was due to an inaccuracy, but you wouldn't
have the opportunity to clear it up. The Fair Credit Reporting
Act, which helped to shape modern-day credit reporting, wasn't
passed until 1970.
Women and minorities need not apply.
The Equal Credit Opportunity Act was still but a dream (first
enacted in 1974), so if you were a woman, establishing credit in
your own name would have been tough. "A 30-something woman was
highly unlikely to have a high-paying job, and would most likely
be laughed out of any bank in which she attempted to secure a
mortgage," says Hagopian. And if you were of color, like Draper's
secretary Dawn Chambers, you would have had an especially hard
time. "During the 1960s, African-Americans were not significantly
represented in the credit reporting system," says Sonya
Smith-Valentine, credit lawyer and founder of the personal
finance education company, Financially Fierce. "African-Americans
were mostly doing business with other African-Americans. Racial
discrimination was still a major issue. Banks were reluctant
to lend to African-Americans so most didn't have a credit
Unwelcome lending requirements.
Bank rejections might have made you turn to booze or even to
momentarily neglect your kids, but such actions could have
impaired credibilty further. "The Welcome Wagon was used as a spy
service, and reports would have things in them like a count of
the liquor bottles in the consumer's trash, or a notation that
their children weren't wearing shoes," says Hankins. Information
about the state of your home was sent to Retailer's Credit -- the
Atlanta-based regional credit bureau that eventually became
Equifax -- and lenders could make decisions based partly on those
highly subjective character conclusions.
Debt collectors had free reign.
Once you did get a credit card or loan, it would have been even
more crucial that you keep it in good standing than in today's
consumer-friendly legal environment. You'd have to wait 10 years
for the Fair Debt Collection Practices Act to pass to enjoy
protection against unfair and brutal collection actions.
Consequently, the guy demanding money would have been relatively
free to harass and threaten you for unpaid balances.
Indeed, some aspects of personal finance were classier before
the tackier disco age, but clearly not all were. Important banking
and credit advances emerged when people spoke up. After all, as Don
Draper said in season three, "If you don't like what's being said,
change the conversation."