Debt for Sale

Debt for Sale: A Social History of the Credit Trap

BRETT WILLIAMS
Copyright Date: 2004
Pages: 160
https://www.jstor.org/stable/j.ctt3fh891
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  • Book Info
    Debt for Sale
    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 $8 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.

    eISBN: 978-0-8122-0078-2
    Subjects: Sociology, Anthropology

Table of Contents

  1. Front Matter
    (pp. [i]-[iv])
  2. Table of Contents
    (pp. [v]-[vi])
  3. Chapter 1 Don’t Charge This Book!
    (pp. 1-10)

    After September 11, 2001, ordinary Americans were urged to shop. Patriotic shopping would thwart terrorists, celebrate public life, and pull us back from the abyss of recession. We needed to be good citizen-consumers, but we knew that we could not really save America by shopping. Too many of us already carried too much debt.

    In this book, I explore credit and debt in American life. I trace the dizzying change of the last thirty years, when credit upended relations between money, work, time, and property. Debt consumed, even ruined, many Americans. I track the connections between debts and debtors and...

  4. Chapter 2 Calling All Convenience Users
    (pp. 11-32)

    Credit cards have transformed the relationships between our time, our work, our possessions, and our money. In this chapter I explore the extraordinary innovations that made credit cards possible. Some of these innovations involved expensive computer systems, whose downside was that only the biggest banks could afford to revamp them every few years and before long these corporate giants were peering into our private lives. I examine government’s tentative pokes at regulating the challenges posed by credit card technology: telling customers the truth about debt, ensuring their privacy, and preventing fraud. Government poked even more tentatively at issues of equal...

  5. Chapter 3 Rustling Up Revolvers
    (pp. 33-60)

    The world faced another oil crisis in 1979. The oil-producing nations withheld oil again, prices leapt, and inflation spread around the world. High prices in turn slowed sales of the world’s products and brought unemployment and recession. Some of the developing nations could no longer pay interest on the loans they owed to American banks. Banks were in trouble, and they pressed the government for help. Because inflation was boosting prices, credit was no longer profitable. The government provided relief: under President Reagan, the interest rates that bankers had to pay for money they borrowed from the central bank dropped...

  6. Chapter 4 Seducing Students
    (pp. 61-91)

    Sometime in the early 1990s I began to notice something new. When students arrived at my university to begin classes, a host of credit card advertisements welcomed them back. These ads beamed from bulletin boards, peered out of shopping bags, lurked on tables near the advising offices, and peppered radio and television. On the quad young salespeople persuaded students to apply for credit cards by offering them free Skittles, Tootsie Rolls, M & M’s, baby boom boxes, dictionaries, mugs, baseball caps, water bottles, sunglasses, airline vouchers, and such T-shirts as “Daytona, MasterCard,” promising a fun-filled spring break. In a full-page...

  7. Chapter 5 Pummeling the Poor
    (pp. 92-124)

    Will Harrison was a gifted designer, crafting exquisite compositions from living plants as well as the black and white silk flowers he arranged during our interview one Saturday morning. Born in 1945, he grew up on a small hog and vegetable farm on North Carolina’s coastal plain. His parents, sisters, brother, and he worked as sharecroppers, rising before dawn each morning to strip and process tobacco from before he was “even tall enough to reach the leaves hanging from the ceiling.” They earned $200 a year. He built up a healthy resentment of white landowners, but felt that these early...

  8. Chapter 6 Search for Solutions
    (pp. 125-132)

    Summer 2003: I bought something online from the Global Shopping Mall in New Delhi, India. It never came, the website shut down, and the telephone was disconnected. When I called to change my debit card the customer services rep began hawking overdraft protection, a checking plus credit line, and a Safety Check Savings Account over the phone. My much-loved family doctor was murdered by two nineteen-year-olds who were caught because they tried to use his credit cards online. Unlike me, they received their purchases, along with a visit from the police. At my doctor’s sweltering funeral we used cardboard fans...

  9. Notes
    (pp. 133-148)
  10. Index
    (pp. 149-152)
  11. Acknowledgments
    (pp. 153-154)