Hostname: page-component-78c5997874-mlc7c Total loading time: 0 Render date: 2024-11-15T07:55:28.217Z Has data issue: false hasContentIssue false
  • English
  • Français

The “Everything Card” and Consumer Credit in the United States in the 1960s

Published online by Cambridge University Press:  19 October 2011

Christine Zumello
Get access Rights & Permissions [Opens in a new window]

Abstract

First National City Bank (FNCB) of New York launched the Everything Card in the summer of 1967. A latecomer in the field of credit cards, FNCB nonetheless correctly recognized a promising business model for retail banking. FNCB attempted not only to ride the wave of mass consumption but also to capitalize on the profit-generating potential of buying on credit. Although the venture soon failed, brought down by the losses that plagued the bank due to fraud, consumer discontent, and legislative action, this final attempt by a major single commercial bank to launch its own plan did not signify the end of credit cards. On the contrary, the Everything Card was a harbinger of the era of the universal credit card.

Type
Research Article
Information
Business History Review , Volume 85 , Issue 3 , Autumn 2011 , pp. 551 - 575
Copyright
Copyright © The President and Fellows of Harvard College 2011

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

1 First National City Bank was founded in 1812 as the City Bank of New York, before becoming National City Bank of New York in 1865; First National City Bank of the City of New York in 1955; First National City Bank in 1962; First National City Corp. in 1968; Citicorp in 1974; Citibank N. A. in 1976; Citigroup in 1998.

2 Zweig, Phillip L., Walter Wriston, Citibank, and the Rise and Fall of American Financial Supremacy (New York, 1995), 803Google Scholar.

3 Jacobs, Meg, Pocketbook Politics: Economic Citizenship in Twentieth Century America (Princeton, 2005)Google Scholar.

4 Cohen, Lizabeth, A Consumer's Republic: The Politics of Mass Consumption in Postwar America (New York, 2003), 11Google Scholar.

5 Ibid., 281.

6 For an enlightened history of consumer credit and its intellectual and institutional foundations up to the end of the 1930s, see Calder, Lendol G., Financing the American Dream: A Critical History of Consumer Credit (Princeton, 1999)Google Scholar.

7 The first bank credit-card plan was launched in 1951 by the Franklin National Bank, Mineola, New York.

8 For a detailed account of the early credit-card histories at Bank of America and Chase Manhattan, see Wolters, Timothy, “Carry Your Credit in Your Pocket”: The Early History of the Credit Card at Bank of America and Chase Manhattan,” Enterprise and Society 1 (June 2000): 315–54Google Scholar.

9 Evans, David S. and Schmalensee, Richard, Paying with Plastic (Cambridge, Mass., 1999)Google Scholar; Manning, Robert D., Credit Card Nation (New York, 2000)Google Scholar; Williams, Brett, Debt for Sale: A Social History of the Credit Trap (Philadelphia, 2004)CrossRefGoogle Scholar; Mann, Ronald J., Charging Ahead (Cambridge, U.K., 2006)CrossRefGoogle Scholar.

10 See “National Banks Issuing Credit Cards–Number of Outstanding Balances: 1970–1992,” Historical Statistics of the United States (New York, 2006), 3–669Google Scholar, Table Cj347-353.

11 Jacobs, Pocketbook Politics, 249.

12 Hyman, Louis R., “Debtor Nation: How Credit Built Postwar America,” PhD diss., Harvard University, 2007Google Scholar.

13 Charge cards enabled cardholders to charge purchases of goods or services at establishments participating in the plan. Charge cards did not usually charge interest, whereas credit cards did. “What Directors should Know about Credit Cards and Check Credit,” Banking 62, no. 8 (Feb. 1970): 24Google Scholar; Williams, Debt for Sale, 12.

14 Credit manager at Sears Roebuck, as quoted in Cohen, A Consumer's Republic, 282.

15 Hyman, , “Debtor Nation,” x, 364Google Scholar.

16 Williams, Debt for Sale, 12.

17 Dave Jones, “Credit Card Climb, On-the-Cuff Living, New Tax Ruling Hypo Versatile Charge Plan,” New York Times, 21 Feb. 1958, 1.

18 Manning, Credit Card Nation, 84–85.

19 Abouchar, Roger J., “Bank Charge Cards in the 1970s,” Banking 62 (Oct. 1969): 34Google Scholar.

20 Shay, Robert, “Consumer Developments in the Market for Consumer Instalment Credit,” Journal of Finance 11 (May 1956): 235–37Google Scholar.

21 Lee Silberman, “Flush but Worried,” Wall Street Journal, 19 Oct. 1967, 1.

22 Erich H. Heinemann, “Credit Cards: Instant Affluence Is on Rise,” New York Times, 1 Aug. 1967, 41.

23 Galbraith, John Kenneth, The Affluent Society, 40th anniversary ed. (New York, 1998), 146Google Scholar.

24 Williams, Debt for Sale, 12.

25 Southard, Garrison A. Jr., executive manager of the California Bankcard Association, as quoted in Banking 60 (Dec. 1967): 88Google Scholar.

26 Cleveland, Harold Van B. and Huertas, Thomas F., Citibank, 1812–1970 (Cambridge, Mass., 1985), 260Google Scholar. Cleveland and Huertas report that, beginning with the first quarter of 1961, real economic activity advanced for thirty-five consecutive quarters.

27 Vietor, Richard H. K., Contrived Competition: Regulation and Deregulation in America (Cambridge, Mass., 1994), 259CrossRefGoogle Scholar. FNCB acquired Carte Blanche in 1965 from Hilton Hotels Corp. amid objections from the Justice Department, which had given it “temporary permission to acquire” until the antitrust was settled. Because of the legal infighting and impending antitrust lawsuit, which had been partly left unresolved, First National City Bank was never able to develop the national potential of Carte Blanche. Carte Blanche was reportedly known in the trade as “Carte Rouge” for its losses; see Evans and Schmalensee, Paying with Plastic, 60. Similarly, New York's Chase Manhattan Bank had announced plans to acquire the credit-card business of Diners Club Inc. but dropped the proposal after the Justice Department threatened an antitrust suit. See “AVCO Negotiates to Enter Credit Card Field by an Acquisition from First National City,” Wall Street Journal, 20 Feb. 1968, 6; and New York Times, 20 Feb. 1968. First National City Bank was the first bank to open a personal loan department, on May 4, 1928. The bank was overwhelmed by the applicants' responses. See Cleveland and Huertas, Citibank, 113–21; Hyman, “Debtor Nation,” 139–47.

28 Cleveland and Huertas, Citibank, 272.

29 “First National City to Issue Credit Card for Retail Store Use,” Wall Street Journal, 17 May 1967, 12.

30 Hyman, “Debtor Nation,” 179–249; Buerger, Alfred A., “Revolving Credit and Credit Cards,” Law and Contemporary Problems 33, no. 4 (1968): 707–17CrossRefGoogle Scholar.

31 Hyman, ”Debtor Nation,” 224.

32 For a detailed analysis of revolving credit after World War II, see ibid., 237–78.

33 Ibid., 259.

34 Langley, Paul, The Everyday Life of Global Finance (Oxford, 2008), 144–46CrossRefGoogle Scholar.

35 Patrick Page Kildoyle, “Bank Credit Card and Check Credit Plans in the Second District,” Federal Reserve Bank of New York Monthly Review (Jan. 1969): 12, 16.

36 Ibid., 14.

37 1967 Annual Report of the First National City Bank, Citigroup Archives, Citi's Center for Heritage and Strategy, New York City, New York (hereafter, Citigroup Archives).

38 “What Everyman Should Know about the Everything Card,” New York Times, 27 July 1967, 21.

39 “Now You Can Charge Back-to-School on the Everything Card,” New York Times, 26 Aug. 1967, 11.

40 Caplovitz, David, “Consumer Credit in the Affluent Society,” Law and Contemporary Problems 33, no. 3 (1968): 645CrossRefGoogle Scholar.

41 “Now Everything Goes on the Everything Card. See How this New First National City Charge Service Will Increase Your Sales, AAA New Customers, Eliminate Your Collection Problems, Reduce Your Overhead, Simplify Your Life,” Explanatory booklet for merchants accepting the Everything Card, 1967, Citigroup Archives.

42 Frank, Thomas, The Conquest of Cool (Chicago, 1997), 133–68CrossRefGoogle Scholar.

43 “Come What May, It All Goes on the Everything Card,” New York Times, 28 May 1968, 24.

44 Frank, , The Conquest of Cool, 112, 135Google Scholar.

45 New York Times, 29 Nov. 1967, 33.

46 Everything Card Newsletter, no. 1 (Sept. 1967): 1, Citigroup Archives.

47 Cohen, A Consumer's Republic, 282.

48 Front cover of the 1967 Annual Report of First National City Bank, featuring Penny Donoghue, the “Everything Girl” and the merchants' sticker for the “Everything Card,” Citi-group Archives.

49 Overseas Citibanker, Feb. 1968, 17, Citigroup Archives.

50 Frank, The Conquest of Cool, 152.

51 “Women Can be Trusted to Use Card Wisely,” Banking 62, no. 10 (Apr. 1970): 126Google Scholar.

52 For a detailed account of how the poor, African Americans, and affluent white women shared a common fate in the denial of access to credit, see Hyman, “Debtor Nation,” 407–42.

53 Borrowing Basics for Women (1975), Citigroup Archives.

54 Davis, Gerald F., Managed by the Markets: How Finance Reshaped America (Oxford, 2009), 110Google Scholar.

55 Master Charge changed its name to MasterCard in 1976.

56 Stevens, William B., “The Expanding Role of Charge Card Associations,” Banking 62 (Nov. 1969): 48Google Scholar.

57 The InterBank Card Inc. was formed in 1966, and it later purchased the licensing rights from Master Charge (of the Western States BankCard Association), which launched a de facto national bank charge card, InterBank–Master Charge, which was similar to the BankAmericard.

58 Stevens, “The Expanding Role of Charge Card Associations,” 88.

59 Bailey, Thomas L., “The Unique Role of the Bank Card Association,” Banking 63 (Oct. 1970): 35Google Scholar.

60 Silberman, Irwin H., “The Varied Views of Justice in Antitrust Matters,” Banking 59 (Aug. 1966): 36Google Scholar.

61 “U.S. Moves to Block Carte Blanche's Sale,” Washington Post, 31 Dec. 1965, A15.

62 “FNCB Gets Carte Blanche,” Banking, 58 (Feb. 1966): 92Google Scholar.

63 Leonard Sloane, “Cracking Down on Credit Card Fraud,” Management Review (July 1966): 61.

64 Leonard Sloane, “Widening Use of Credit Cards Gives Issuers More Headaches,” New York Times, 28 Oct. 1968, 69.

65 “Stolen Credit Cards Costly to Bank Here,” New York Times, 18 Jan. 1968, 1.

66 United States House of Representatives, Hearings before the Subcommittee on Postal Operations of the Committee on Post Office and Civil Service, “The Plastic Jungle,” 91st Congress, 1st and 2nd sess., 29 Oct. 1969, 19 Nov. 1969, 28 Jan. 1970, and 4 Feb. 1970, 84 (here-after, Plastic Jungle Hearings).

67 Seymour Rotker, Executive Assistant to the District Attorney, Bronx County, Bronx, N.Y., Plastic Jungle Hearings, 87.

68 “Use of Stolen Everything Cards Leads to the Arrest of Gang,” Citibank News, 1 Feb. 1968, 1, Citigroup Archives.

69 “Credit Card Fraud Leads to Arrest of 8 in Bronx,” Citibank News, 16 May 1968, 1, Citi-group Archives.

70 “Use of Stolen Everything Cards Leads to the Arrest of Gang,” 1; “Misuse of Credit Card Leads to Arrest of 23,” Citibank News, 7 Aug. 1969, 1, Citigroup Archives.

71 “A major event of 1969 was the conversion of our Everything Card, New York's leading charge card, to Master Charge. The change resulting from Citibank's affiliation with the Interbank Card Association, extends the useful network of our charge card nationwide and to Puerto Rico and 44 countries overseas.” First National City Bank, Annual Report, 1969, Citi-group Archives.

72 Jacobs, Pocketbook Politics, 259–60.

73 Hyman, “Debtor Nation,” 368, 397–413. See also Edward C. Burks, “150 Women on Relief Demand Korvette Credit,” New York Times, 22 Nov. 1968, 33.

74 Cohen, A Consumer's Republic, 345.

75 “Text of President Johnson's Special Message to Congress on Consumer Protection,” New York Times, 17 Feb. 1967, 24.

76 Betty Furness was sworn in as President Johnson's special assistant for consumer affairs on May 1, 1967. She headed the Committee on Consumer Interests, manned by eight cabinet secretaries. She advertised Westinghouse products in the 1950s, so her nomination was not unanimously well received by consumer groups. She resigned in January 1969. See “Betty Furness Takes Over as Consumer's Advocate in White House,” New York Times, 2 May 1967, 28; “In Defense of Betty Furness,” Wall Street Journal, 13 Mar. 1967, 12; “Betty Furness Resigns, Thinks Nixon Will Abolish Her Agency,” Washington Post, 8 Jan. 1969, E7; “Stolen Credit Cards Costly to Bank Here,” New York Times, 18 Jan. 1968, 1.

77 New York was not the only area in the U.S. to experience criminal activity involving credit cards. Several cases of fraudulent use of credit cards and credit-card rackets had already been publicized in Chicago in the mid-1960s and were again investigated in 1969. See “Federal Jury Studies Credit Card Rackets,” Chicago Tribune, 28 Feb. 1969, 12; “Bank Credit Cards Come of Age,” Chicago Tribune, 23 Sept. 1969, W4.

78 Plastic Jungle Hearings, 4.

79 “Text of President Nixon's Message to Congress on Proposals to Help Consumers,” New York Times, 31 Oct. 1969, 22.

80 For a more detailed account of the Commission's work, see Banking 63 (Dec. 1970): 84–87Google Scholar.

81 “Fed Testifies on Credit Cards,” Banking 62 (Jan. 1970): 34Google Scholar.

82 Robert J. Cole, “Credit Card Protection Appears Ample for Both Unsolicited and Accepted Ones,” New York Times, 2 Jan. 1969, 47.

83 Proxmire, Senator William, “Consumer Credit Legislation: The Future,” Banking 61 (Apr. 1969): 47–108Google Scholar.

84 Williams, Senator Harrison A., quoted in Kirk, John, “Losses are Still in the Cards for Bankers!” Banking 63 (Dec. 1970): 85Google Scholar.

85 “The President's Committee on Whose Interests?” Washington Post, 11 Dec. 1969, A18.

86 Plastic Jungle Hearings, 9–20.

87 Brimmer, Andrew F., “Statement before the Subcommittee on Special Small Business Problems,” Hearings before the Select Committee on Small Business, Washington D.C., 10 June 1970, 498Google Scholar. Andrew F. Brimmer, from Philadelphia, was a member of the Board of Governors of the Federal Reserve from 1966 to 1974.

88 “A.B.A on Unsolicited Credit Card,” Banking 62 (Nov. 1969): 22Google Scholar.

89 Larkin, Kenneth V., “Dealer Paper in the ‘Age of the Consumer,’” Banking 63 (Oct. 1970): 32Google Scholar. Kenneth V. Larkin was the senior vice president of the Bank of America, San Francisco, and chairman of the American Bankers Association in 1970. Evans and Schmalensee report an interesting anecdote about Kenneth Larkin, who visited a drugstore in a small town hoping to persuade the owner to accept BankAmericard. The owner welcomed Larkin as the savior of his business, because he was then “handing his back office headaches over to Bank of America,” 52.

90 Louis Harris's address at the National Credit Card Conference sponsored by the American Bankers Association, Nov. 1970; see Banking 63 (Dec. 1970), 84Google Scholar. Mandell, Lewis, Credit Card Use in the United States (Ann Arbor, 1972)Google Scholar.

91 One can look at the activities of SOUP (Students Opposing Unfair Practices). See Jan Nugent, “Consumer Groups Trigger Regulatory Tremors,” Washington Post, 23 Nov. 1969, 113.

92 Leinsdorf, David and Etra, Donald, Citibank (New York, 1971), xiGoogle Scholar.

93 Walter B. Wriston's memorandum to all officers on the Nader Project, as reprinted in Citibank News, 23 July 1970, 1, Citigroup Archives.

94 “Ralph Nader's Study of First National City Bank Continues,” Citibank News, 6 Aug. 1970, 1, Citigroup Archives.

95 Leinsdorf and Etra, Citibank, 35.

96 Citibank published a response to the Nader Report; see Citibank, Citibank, Nader, and the Facts (New York, 1974)Google Scholar.

97 Stevens, “The Expanding Role of Charge Card Associations,” 47.

98 Visa and Mastercard, which are associations of financial institutions, accounted for 72 percent of all payment-card transactions in the United States in 2005; see Evans and Schmalensee, Paying with Plastic, 6.

99 Ibid., 7.