Boomers Banked the Old-Fashioned Way

A major financial institution announced this week that it was rolling out a new smartphone app that could control all functions of their ATMs. For several years now banks have accepted check deposits through their smartphone apps when the consumer takes a photo of the check. This announcement, however, eliminates the need for a physical ATM card altogether. You don’t need a weatherman to see which way the wind blows. The writing appears to be on the wall as we inevitably move toward a future where all monetary transactions are handled through some personal electronic device.

That dots the “i’s” and crosses the “t’s” for placing the boomer generation as the last to be required to visit a bank teller in person to do routine banking functions such as deposit checks and withdraw funds. Banks have been discouraging the traditional face-to-face bank teller visit — the one boomers recall — for nearly 40 years now. They have trained us to use the ATM instead. Now they want to come one step closer to eliminating the need for an ATM at all.

What triggered this latest nostalgia bomb in the mind of Mister Boomer was that recently he and his spouse opened an account at a neighborhood bank for the sake of convenience. This particular bank is a little unlike others in that there are no bullet-proof partitions separating customer from teller, so there is no need to shout through a hole to relay one’s reason for today’s banking. This was much more like the banks of yore.

Mister Boomer was probably around six or seven years old when his mother brought him and his brother, with his sister in tow in the kids’ wagon, to the neighborhood bank. This visit was to open an account for Mister Boomer. The nice lady behind a desk got the pertinent info, Mister B’s mom handed over a couple of dollars — more than likely the contents of a birthday card from his grandmother — and then went behind the teller counter to finish the transaction. When she returned, she handed Mister B the book — which he was now informed was a “passbook” — and was greeted with a “Welcome to the Bank, Master Boomer.” That was the way it was — men and women would be addressed as “Mister” or “Missus,” girls as “Miss” and boys under the age of twelve as “Master.”

For the next twenty years Mister B banked at that branch. Each time he produced his passbook, where tellers dutifully recorded deposits and withdrawals by stamping the date and amount. When the pages of one book were filled, another was given to take its place. The tellers knew your name when you walked through the door, and they were always happy to see you. It was like Cheers — a place where troubles were all the same, and everybody knew your name.

Of course, boomers did not have a choice but to visit a bank weekly, at the very least. We had to stand in line with all the other people who just got their paychecks in order to deposit part and take back the cash we would need for the week. There was no such thing as “direct deposit.” This might result in lines of 45-minute waits or longer, despite a full complement of tellers for every window. It meant a race to the bank after work if you wanted to cash your paycheck, or using a lunch hour to do so instead. Some banks began to open one day a week a little beyond their usual 10 a.m. to 3 p.m. hours (known as “bankers hours” to boomers) to accommodate the weekly crush. Others established drive-through windows to increase the number of tellers and lessen the lines, only to have long lines at the drive-throughs.

Mister Boomer’s neighborhood bank wasn’t much bigger than the size of a gas station. It was dwarfed by the size of its parking lot, which was easily double its size. Drive-through windows first appeared in the late 1920s, when people began owning more cars than horses, but it wasn’t until the late 1960s when Mister B’s bank installed drive-throughs. The bank’s main branch had them probably since the building was built, which looked to be the 1950s. But Mister B’s branch was old-fashioned. Following suit, Mister Boomer didn’t use the bank’s drive-throughs until the bank established Saturday morning drive-through hours in the early 1970s. If you couldn’t make it to the bank on Friday payday, the Saturday drive-through window was going to be a life-saver.

Like most boomers at this time in history, Mister Boomer has moved along to embrace whatever ways the banks have laid out for us to give them our money. Forty years ago, would any boomer have envisioned a day when we could make bank transactions and bill payments by computer, let alone a smartphone? Mister Boomer, though, wouldn’t mind banking at a place where everybody knew his name.

Do you remember banking in our boomer days fondly, or as a necessary evil?

Boomers Watched the World of Credit Evolve

Credit cards are so much a part of our daily lives, it’s hard to believe they haven’t always been around. In fact, most baby boomers can recall a time in their early youth that their parents did not have credit cards of any kind.

There is mention of some form of credit card dating back to the late 1800s in Europe, but the first ones that began to appear in the U.S. were issued in the 1920s by oil companies and hotels. These cards were more like promissory notes than what we know as a credit card today in that they could only be used at the one business that issued the card, and the bill was due in full each month.

Department stores like Sears also jumped on the bandwagon with their own credit systems, but in each case the card was accepted only at their stores, and any balance would have to be paid in full when the bill came due.

The first bank card was similar. Issued in 1946 — the first year of the Baby Boom — by the Flatbush National Bank in Brooklyn, New York, its “Charg-It” system required both the local merchant and the purchaser to have accounts at the bank, so all monthly transactions occurred within the one bank.

Diners Club issued the first nationally accepted card in 1950 for a select number of mostly higher-end restaurants. Member restaurants would be paid by Diners Club, then restaurant-goers who chose to pay with a Diners Club card would pay Diners Club rather than the restaurant. Their monthly bill would have to be paid in full.

American Express decided to enter the fray in 1958, though it offered more flexibility in where and for what type of purchase the card could be used. Like the cards that preceded it, theirs was only accepted by member companies, and the bill was due in full each month.

In 1959, Diners Club introduced revolving credit, where the consumer no longer had to pay the bill in full each month. Instead, a partial payment could be made, and a finance charge was applied on the remaining balance.

By the 1960s, the Baby Boom was winding down and the use of credit cards was increasing, especially by companies with traveling salesmen. Bank of America formed a company in 1966 that would change the closed system that had existed for credit, allowing each member bank in their system to issue their own credit cards. Its biggest innovation, however, was that now transactions could be between banks anywhere, so consumers could use their BankAmerica cards (later known as Visa) at any member company, anywhere in the world. A rival company was also formed in 1966, called the InterBank Association. Member banks issued MasterCharge cards (today known as MasterCard) to serve the same purpose as the BankAmerica cards at any merchant that accepted it.

As time went on, banks became members of both card issuing systems, so transactions could occur and funds could be transferred between banks anywhere. For these reasons, Congress began regulating the cards and the banks’ consumer policies in the 1970s.

The Discover card made its debut during the Super Bowl in 1986, American Express allowed paying over time in 1987, and the industry has been constantly evolving since.

Mister Boomer’s aunt had worked in the credit department of a Sears store in her area for many years, but even though he knew some neighborhood adults had a Sears charge, his parents did not. Years later his parents adopted the department store card concept with gusto, acquiring cards from Sears, Montgomery Ward and others.

Mister Boomer remembers getting his first credit card at the age of 18. It was a Visa card, issued by his neighborhood bank. His father thought it would be a good idea for him to establish his credit early. Mister B kept it mainly for emergency purposes, and not even in his wallet for the first couple of years. Like most boomers, a $10 or $20 bill hidden in a wallet compartment was all that would be necessary in an emergency. After college he added a MasterCharge card, but still only used the cards for large purchases such as airline tickets, tires or car repairs.

Mister Boomer’s introduction to the world of credit happened when he was less than 10 years old. It was the beginning of the 1960s, so national bank cards weren’t yet available. The family was purchasing their first washer and dryer, so Mister B went along for the ride when his father drove to the local Good Housekeeping store. Posted in the window, and again inside the store, were hand-painted paper signs that read, “90 days, same as cash.” Mister B was curious about the phrase, and asked his father what it meant. He told him that he would only do business with a company that offered this, because it meant he had 90 days — three months — to come up with the money. The “same as cash” meant there was no extra charge, as long as the bill was paid within the three month period. It was, in an era when a handshake was enough assurance that a bill would be paid, a credit card-like transaction without the need for a credit card — or bank. This “free” credit meant the family could get its first taste of modern appliances. Up to that point, the family washer had a hand wringer and the “dryer” was a backyard clothesline.

How were you introduced into the world of credit, boomers? Do you remember a time when your parents didn’t have any credit cards?