Using credit to buy everyday products and services wasn’t common before 1920 because the financial system, culture, and types of goods people bought did not yet support widespread consumer borrowing.

Limited consumer credit systems

Before 1920, there simply wasn’t a well-developed system for ordinary people to borrow money to shop. Banks mainly focused on lending to businesses and farmers, not to regular households for shopping.

There were no modern credit cards or large national credit agencies, so it was hard for lenders to judge whether a stranger would actually repay a loan.

Cash, barter, and local trust

Most people paid with cash or, in rural areas, through barter and very small “store tabs” based on personal relationships.

When store credit was used, it was usually short-term and expected to be repaid quickly, not open-ended like modern revolving credit, so it did not function as a widespread way to finance consumer lifestyles.

Cultural attitudes toward debt

Social attitudes were much more suspicious of personal debt. Many families saw owing money for non-essentials as risky or even morally questionable, so being debt-free was considered a mark of responsibility and respectability.

Because of this, people were encouraged to save up first and buy later, which reduced the demand for consumer credit.

Lower incomes and basic spending

Most households had low incomes and spent the vast majority of their money on necessities like food, rent, and basic clothing.

With so little disposable income and almost no safety net, taking on debt for purchases was dangerous; a bad harvest, job loss, or illness could make even a small loan impossible to repay.

Few big-ticket consumer goods

Before the 1920s, there were far fewer expensive consumer goods that would “justify” installment credit for ordinary people.

Cars, household appliances, and other high-priced items were either rare or considered luxuries, so most purchases were smaller, everyday items people could and did pay for in cash.

What changed after 1920

In the 1920s, mass production of cars and home appliances took off, and companies started offering installment plans to make these expensive goods affordable over time.

As incomes rose modestly and advertising promoted a new consumer lifestyle, using credit slowly became more accepted and eventually normal for buying big items, which was a major shift from the pre‑1920 cash-first mindset.

TL;DR: Before 1920, weak consumer lending systems, strong anti-debt attitudes, low incomes, and the lack of mass-market expensive goods all combined to make using credit for everyday products and services rare.

Information gathered from public forums or data available on the internet and portrayed here.