Now we have computer systems that can instantly determine the funds available in an account when a transaction occurs. One bank can also contact another bank instantly when an individual wants cash from a bank that they are not a member of.
How did people manage to do this when there were mountains, oceans, and seas between one bank another?
In: Economics
With checks, you only accepted them form people you trusted. You were often required to show a driver’s license or a bank-issued check guarantee card, and if anything looked fishy, they simply would not be accepted. If there was a mountain or ocean between your purchase and your bank, most establishments would not accept your check as a matter of policy. Instead, you’d use travelers’ checks which were prepaid and worked almost exactly like gift cards do today.
Credit and charge cards were even harder to use, many places simply didn’t accept them. Being able to use a card for fast food or at a convenience store is a relatively new thing, McDonald’s didn’t take cards until the early 2000s. Many places, like gas stations or department stores, would only take their own card…the Discover card grew out of the Sears store card. Otherwise, it was much like a check, you only allowed it for people you trusted.
Before credit cards (an era where women were often not in control of their finances), it wasn’t unusual for stores to allow people to buy things on store credit. During the day (stores weren’t usually open evenings) the husband would work, the wife would shop, put everything on store credit, and the husband would pay one big weekly or monthly bill. If it wasn’t paid, they’d get cut off until it was and likely offered less credit in the future. Checks and cards were a natural extension of this, and stores would employ the same system of informal scrutiny as they did before.
Latest Answers