AP Success - AP US History: Credit and Consumerism

The 1920 census showed that, for the first time, more than 50 percent of the U.S. population lived in urban areas.

The average work week had decreased from 59 hours in 1900 to 51 hours in 1920.

Between 1900 and 1920, the number of passenger cars registered in the United States increased from 8,000 to 8.1 million.

In 1900, less than 8 percent of all U.S. dwellings had electric service. By the end of the 1920s, the number was up to 68 percent.

…The thing that helped to bring all these industrial and technological marvels within the reach of so many consumers — was the expanded use of installment credit. The big breakthrough came in 1919 when General Motors Acceptance Corporation (GMAC) became the first to make financing available to middle-income car buyers. Instead of having to come up with the entire purchase price, prospective car buyers needed only a down payment and an income that was big enough to cover monthly payments over the life of the loan. Before long, manufacturers of other “big ticket” items began to adopt the practice. And if consumers were hesitant to go into debt, the flood of advertisements in mass media outlets — newspapers, magazines, and radio — helped them to overcome their inhibitions.