For Everything

Some 1,800 bankers gathered last week at the annual National Instalment Credit Conference in Chicago searching for new prescriptions to satisfy the U.S. consumer's insatiable craving for credit. During the past decade, personal income has increased 69% to $354 billion, but consumer credit has bolted 201% to $43 billion. New installment loans in January hit an alltime peak of $3.8 billion.

"Instant Money." Every day banks are sprouting new gimmicks to lure credit customers. Taking a cue from the successful Diners' Club (TIME, Sept. 22), some 200 banks have shuffled themselves into the credit-card game. Last week Georgia's ten hard-selling Citizens & Southern National Banks popped out the latest variation, advertised "Instant MONEY--Cash Loans Within 20 Seconds." The C. & S. device is a charge card that enables one to draw immediate cash up to thousands of dollars from any C. & S. teller's window, or to charge consumer goods at 1,000 Georgia stores. At month's end, the cardholder gets a single bill from the bank. Last week C. & S. was busy mailing cards to 100,000 customers, and offering them to all other good credit risks.

Banks have found the credit card a sure-fire way to drum up credit business (instead of taking a one-shot loan, the cardholder becomes a permanent credit customer). In the typical system used by Chase Manhattan Bank, the stores pay a fee of 6% or less on charge-card business, depending on volume. Cardholders get the service free if they pay their monthly bills on time; or they can pay in five monthly installments, with a 1% monthly charge on the unpaid balance.

Last week Manhattan's Bankers Trust Co., seventh biggest in the U.S., launched a plan to give customers frequent loans without bothering to make loan applications. The system, adopted so far by some 20 major banks: the customer gets a line of credit, usually from $100 to $6,000, that goes into his checking account. He then writes checks, pays back in twelve or more monthly installments, is charged 1% or more monthly interest on the outstanding balance.

This idea, called revolving credit or check credit, was pioneered by Boston's First National Bank in 1955. Last week its Vice President Harold B. Hassinger told the Chicago meeting that profits from the plan not only run 50% higher than on personal loans, but that it has helped boost personal loan business 40% by popularizing credit. Said Hassinger: "Don't be surprised if this plan does ultimately displace most everything but the open charge account with the grocer and other retail outlets."

The limits of quick credit are bounded only by the businessman's imagination. Last month Amarillo's First National Bank wheeled out a car credit card to buck the big auto financing agencies. The holder presents the card in the auto showroom to prove that he has the bank's approval for a loan, like a cash buyer can drive out in a new car within minutes.

Charm on the Cuff. The new credit ideas bring closer the credit man's dream of a single card or check for almost all goods and services. The granddaddy of the credit cards, Diners' Club, has recently added health resorts, beauty parlors, charm schools, theaters from Broadway to Los Angeles, even boxing arenas and ballparks; for the fiscal year (ending March 31) it expects membership to rise by 425,000 and hit more than 1,000,000, billings to be $140 million, up 54%. American Express, which recently signed 3,753 auto dealers to honor its cards on repair jobs, has attracted 600,000 members. Hoteluminary Conrad Hilton has signed Socony Mobil's 32,000 gas stations, plans to launch a card for most consumer wants, starts with 1,000,000 Hilton-Statler cardholders. Name: Carte Blanche.

Does this outpouring mean credit is being used to excess? Bankers think not. Their delinquency record is minuscule; the recession's trough produced few deadbeats. Ben H. Wooten, president of Dallas' First National Bank, told the credit conference: ''Private credit has not been abused. The amount outstanding today is not excessive in relation to our ability to service it."

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