Think of it. If everyone paid cash for their homes, there would be zero foreclosures right now, right?
To get a feel for what would happen if only cash were used for everything take a look at India before 1990. Was not a pretty sight.
When did credit cards come into existence? I don't think they were around until maybe the 1950's??? My guess is that people got mortgages for houses, but everything else was cash or checks that weren't made of rubber.
Back in the mid-1970's, having good credit was honorable. If you paid a bill by a certain date, you were given a 1% discount, so everyone made a good effort to pay on time. Then the accountants started reminding their clients that you're getting a 1% discount for paying early, but your bank was paying you 1.5% for keeping your money in the bank.
That has nothing to do with today's situation, but it's interesting to think about.