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American Morning

A Look at America's Switch from Paper to Plastic

Aired August 03, 2001 - 11:07   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LINDA STOUFFER, CNN ANCHOR: Well, this is a pretty common question: Paper or plastic? Well, in this case, we're not talking about all these grocery bags, but how you pay for your groceries, and just about everything else you may be buying.

CNN's Bill Delaney looks at our switch from cash to credit cards.

(BEGIN VIDEOTAPE)

BILL DELANEY, CNN CORRESPONDENT (voice-over): To walk one end of the U.S. economy to the other in about half an hour or so, walk from one end of Harvard Street outside Boston to the other, from the mostly yuppie-fied town of Brookline where most are quite well off, even if they worry about the market these days, on to the working class Boston neighborhood of Austin, where most people's idea after market is still a place with tomatoes, economic worlds apart, united by plastic -- the all purpose, all-American deferred payment plan that can cover your expenses for birth, death and just about everything in between.

In Austin, Bob Webber of Model Hardware says 80 percent of his business credit cards.

BOB WEBBER, MODEL HARDWARE: They are such an integral part of doing business nowadays, it's amazing. We process very, very few checks.

DELANEY: As for cash, well, Webber got started back in 1959, claiming now to remember a time when he says it was hardly any color TV, yet nearly all the money was green. Credit cards?

WEBBER: I don't each know if many people knew what they were. I'm so smart 20 years ago, I said, credit cards, they'll never catch on.

DELANEY: They've been catching people ever since -- $700 billion in credit card debt in the U.S., up from $250 billion 10 years ago. Bill Fowler of Webber Hardware paid cash most of his life, then he got sent a credit card, he never asked for it.

UNIDENTIFIED MALE:: I'm sorry I ever took it.

DELANEY (on camera): How come.

UNIDENTIFIED MALE:: Now I owe $5,000 in credit card, you go and you take your grandchildren out and buy them this, buy them that, next thing you know, bingo.

DELANEY: Bingo.

UNIDENTIFIED MALE:: Yes, $5, 000 in the hole.

DELANEY (voice-over): In Austin, though, where hardly anyone is rich, still buying and selling with credit cards, sometimes like there was no tomorrow.

(on camera): Meanwhile, here at the high end of Harvard Street, credit cards are every, where you can buy a new age book, there's a fancy Russian restaurant, but if you wanted this 19th century cylinder desk, you've got a problem.

(voice-over): Jefferey Diamond, proprietor of the antique store Room with a View, just never liked credit cards.

JEFFEREY DIAMOND, ANTIQUE PROPRIETOR: I deal in antiques. It's probably an antiquated theory, I kind of consider myself and island out here. I didn't want to pay any fees. To my recollection I don't think we ever lost one sale as a result of that in 16 years.

DELANEY: On the other hand, at Diamond's new Room with a View on Boston's historic Beacon Hill, he does now take credit cards. The tourist trade, you see, demanded it. After 50 years, even the most iron will seems sooner or later to turn to plastic.

Bill Delaney, CNN, Boston.

(END VIDEOTAPE)

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