Both economically and psychologically, postwar America was primed to take advantage of the onslaught of consumer goods. Victories in Europe and the South Pacific had raised confidence in the country to a new high. The Social Security system, now firmly entrenched, promised every American a secure old age. Other government programs, such as worker’s compensation and unemployment and disability insurance, and the spread of life insurance contributed to a growing sense of economic security for millions of Americans. But most importantly, for the first time in the century the average American family’s income exceeded the cost of its basic needs. Discretionary income, a term previously unknown to most Americans, became the watchword of this new era of growth in consumer credit.
Consumer credit grew at a phenomenal rate in the twenty-five years following World War II. In 1945, consumer credit stood at $5.7 billion. By 1970, it had grown to $143.1 billion, and by 1980 to over $375 billion, excluding mortgage debt.
With the stage appropriately set, companies prepared to revive their dormant credit operations. The oil companies, retailers, and airlines all moved back into the credit card field. They brought with them a number of new programs and technological innovations as they sought new ways to expand their operations and achieve the profits that had eluded them earlier.
Just prior to the Second World War, Mobil, Gulf, and Standard Oil together had more than one million cards in existence. Because of the rationing of gas during the war, all of those cardholders had been lost. At war’s end, in an attempt to rebuild their cardholder base, several large oil companies sent free cards to their prewar customers. They also began marketing campaigns to new college graduates, who received either an unsolicited card or an application for a card. In spite of the high cost of the card program and the misgivings of many oil companies, competitive pressures forced all oil companies to follow suit. Many of the companies also began to allow their customers to repay purchases in monthly installments, a practice that had seen limited use prior to the war.
A major innovation for the gasoline credit cards during this period was the introduction in 1952 of a metal credit card. Although metal charga-plates had been used by department stores since 1928, the oil companies had clung to the paper charge cards they had always issued. The new metal charge card was developed by the Standard Oil Company of California, which called it the Chevromatic, to link it to its Chevron- brand gasoline. The system was ordered from the Farrington Manufacturing Company, which had long supplied charga-plates to the department stores.
While other oil companies had in fact experimented with the idea before, they had given it up as being too expensive. Standard decided to fully implement the procedure in 1952 following a twelve-month pilot project in Arizona. That project revealed that the use of such standardized plates cut errors in identification by 94 percent. In addition, charge- backs to dealers due to being unable to identify purchasers were cut by 80 percent, and the time spent in making out sales slips by 50 percent. To keep the familiar appearance of the paper credit card, Standard clamped the embossed aluminum plate onto the back of the card, thereby creating the embossed, full-size credit card that would later be made from plastic. These cards were distributed to all of Standard’s half a million customers in the western United States.