Abstract: Prices are Political: Credit Card Interest Rates in the Age of Inflation, 1968-1980

Sean H. Vanatta

Abstract

Beginning in the late 1960s and continuing through the 1970s, consumer and labor groups placed credit cards at the center of a revived purchasing power politics that linked economic citizenship with the wide availability of safe, inexpensive credit. “Prices Are Political” tells this story.

It focuses on the Universal Consumer Credit Code (UCCC), a model state law intended to simplify and clarify consumer credit regulation. The federal Truth-in-Lending Act, adopted by Congress in 1968, made credit costs more transparent, and subject to new political agitation. The UCCC, also unveiled in 1968, provided a vehicle for consumer and labor groups to lobby for new, comprehensive interest rate limits on credit cards at the state level. And they were successful: Although credit cards had not been subject to usury limits in most states before the Truth-in-Lending Act, by 1980 almost all states limited annual credit card interest rates to 18 percent or less. By fighting for low interest rates, consumer and labor groups shifted the locus of pocketbook politics, away from wages and prices—where these groups were being forced apart by inflation—and toward the price of credit, while also demonstrating the paramount importance of federalism to the postwar financial-regulatory system.