Book description
Credit and debt appear to be natural, permanent facets of Americans'
lives, but a debt-based economy and debt-financed lifestyles are
actually recent inventions. In 1951 Diners Club issued a plastic card
that enabled patrons to pay for their meals at select New York City
restaurants at the end of each month. Soon other "charge
cards" (as they were then known) offered the convenience for
travelers throughout the United States to pay for hotels, food, and
entertainment on credit. In the 1970s the advent of computers and the
deregulation of banking created an explosion in credit card use-and
consumer debt. With gigantic national banks and computer systems that
allowed variable interest rates, consumer screening, mass mailings,
and methods to discipline slow payers with penalties and fees,
middle-class Americans experienced a sea change in their lives.
Given the enormous profits from issuing credit, banks and chain
stores used aggressive marketing to reach Americans experiencing such
crises as divorce or unemployment, to help them make ends meet or to
persuade them that they could live beyond their means. After banks
exhausted the profits from this group of people, they moved into the
market for college credit cards and student loans and then into
predatory lending (through check-cashing stores and pawnshops) to the
poor. In 2003, Americans owed nearly trillion in consumer debt,
amounting to 130 percent of their average disposable income. The role
of credit and debt in people's lives is one of the most important
social and economic issues of our age.
Brett Williams provides a sobering and frank investigation of
the credit industry and how it came to dominate the lives of most
Americans by propelling the social changes that are enacted when an
economy is based on debt. Williams argues that credit and debt act to
obscure, reproduce, and exacerbate other inequalities. It is in the
best interest of the banks, corporations, and their shareholders to
keep consumer debt at high levels. By targeting low-income and young
people who would not be eligible for credit in other businesses, these
companies are able quickly to gain a stranglehold on the finances of
millions. Throughout, Williams provides firsthand accounts of how
Americans from all socioeconomic levels use credit. These vignettes
complement the history and technical issues of the credit industry,
including strategies people use to manage debt, how credit functions
in their lives, how they understand their own indebtedness, and the
sometimes tragic impact of massive debt on people's lives.
Brett Williams is Professor of Anthropology at American University.
She is the author of Upscaling Downtown: Stalled Gentrification in
Washington, D. C.
