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15 wrz 2021 · The “installment plan” is the precursor to today’s BNPL craze. Paying off purchases weekly or monthly evolved from 1840 onward, as makers of furniture, pianos and farm equipment looked to make...
The method of buying large ticket items with a small deposit and instalment payment plan was a feature of the 1920's. Previously only the wealthy could afford to pay cash for items like pianos, phonographs, radios, fridges, vacuum cleaners, and washing machines.
New credit practices were also necessary to accommodate the new employment structures of factory production. The waged labor that put cash in workers’ hands also led them to undertake new financial obligations—like installment buying—which in turn gave rise to temporary liquidity problems.
Installment plans were credit systems where payment for merchandise/items is made in installments over a pre-approved period of time. In the 1920s, the items people could purchase with an installment plan included: automobiles, automobile parts, household appliances, radios, phonographs, pianos, and furniture.
The 1920s was a decade of increasing conveniences for the middle class. New products made household chores easier and led to more leisure time. Products previously too expensive became affordable. New forms of financing allowed every family to spend beyond their current means.
This chapter examines the modern credit system that took shape after World War I. Modern debt after World War I was defined through two new debt practices—installment credit and legalized personal loans—which reflected the social and economic order that emerged out of the new industrial economy.
Spiegel's example prodded Sears and other retailers to follow suit. The result was a credit revolution marked by “the installment plan.” Another leader in the credit revolution was the Household Finance Corporation. Founder Frank Mackey opened a loan office on Madison Street in 1885.
