Why was the use of credit uncommon prior to 1917?

Prior to 1917, the use of credit was uncommon for several interrelated reasons that highlight the evolution of financial systems and consumer behavior. Firstly, accessing financial institutions was often a challenge for many individuals. Banks were not as widespread as they are today, and many people lived in rural areas where banking services were limited. This geographic and institutional inaccessibility made it difficult for many to engage in credit transactions.

Additionally, cultural attitudes played a significant role. People predominantly preferred using cash for purchases, largely due to a strong belief in living within one's means. The idea of borrowing money was not as socially accepted, as many viewed debt with skepticism and viewed cash as a more reliable means of transaction.

Furthermore, the absence of laws governing credit transactions further contributed to its unpopularity. Without a regulatory framework, both lenders and borrowers operated in a less secure environment, which discouraged the use of credit. This lack of legal structure left many individuals wary of engaging in credit agreements due to fears of predatory lending practices or unfavorable terms.

The combination of these factors—limited access to financial institutions, a preference for cash transactions, and the absence of legal protections for credit agreements—made the use of credit uncommon before 1917. This historical context underscores the significant