What was possible to buy on credit in the 1920s?


Quick Answer

Since the 1920s was a time of great economic boom, most people could buy nearly anything they wanted on credit with money that they did not have. Banks would freely lend generous amounts of money to nearly any person who could prove that they would pay it back at some point.

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Full Answer

The ability of banks to lend large amounts of money to people who were probably not economically able to pay it back in any amount of reasonable time was one of the major reasons that the economy crashed in the 1930s. People who were able to get approved for credit would borrow much more money than they needed. They would then use this money to live far above their means by purchasing luxury household appliances, vehicles and even luxury items that were usually reserved for the very rich. People would purchase large items on credit or installment buying which allowed them to pay back in time. If they could not pay this money back, the banks or lenders would repossess the items, leaving people without many things that they may have needed. People who used credit during the 1920s pushed themselves very far into debt, which made their experience during the Great Depression worse.

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