The post-war era led to a major rise in everyday consumer borrowing and made using credit a normal, even expected, part of family life.

Core effects on borrowing

After World War II, families moved from a culture of saving and rationing to one of spending and “catching up” on deferred wants.

Rising incomes, low unemployment, and economic optimism made households more willing to take on debt to improve their standard of living.

Growth of mortgages and home loans

  • Government-backed loans (FHA and VA) made it far easier to buy homes with low down payments and long repayment terms.
  • Homeownership surged in new suburbs, and mortgage debt became one of the central forms of consumer borrowing.

Installment plans and big-ticket items

  • Installment credit for cars, appliances, and furniture expanded, letting families “buy now, pay later” instead of saving first.
  • Automobile credit in particular exploded after 1945, accounting for a large share of the increase in consumer loans.

Changing attitudes toward debt

  • Debt shifted from being seen as something risky or shameful to being viewed as a practical tool for achieving the “American Dream” of house, car, and modern conveniences.
  • Social pressures and advertising encouraged people to keep up with neighbors, normalizing borrowing as part of everyday life.

Long-term significance

  • By the later post-war decades, a mass consumer credit system was firmly in place, with a large share of families holding some form of installment debt.
  • This laid the foundation for today’s credit-driven consumer economy, where borrowing is deeply built into household financial behavior.