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  • Debt for Sale: A Social History of the Credit Trap
  • Dale L. Flesher
Brett Williams. Debt for Sale: A Social History of the Credit Trap. Philadelphia: University of Pennsylvania Press, 2004. 154 pp. ISBN 0-8122-3817-6, $24.95 (cloth).

This volume covers a social history of modern consumer credit, specifically, credit card debt, pawnshops, and storefronts that offer check-cashing services and paycheck loans. Consumer credit is largely a product of the past half century. Diners Club issued its first credit cards in 1951, and Carte Blanche, American Express, and other entities soon followed suit. In the 1970s the advent of computers and the deregulation of banking resulted in an explosion in the use of credit cards. Initially, credit cards were offered only to "good" credit risks—people who could pay their bills on time. However, bankers soon realized that customers who paid their bills promptly were not a source of interest revenue. Thus, banks turned to people who were riskier: individuals who could not pay their balance in full but who would faithfully pay interest. As the credit market for the borderline, struggling middle class became saturated, bankers turned to even riskier customers—college students and the very poor. The author points out that this expansion of credit has become a modern form of peonage, as credit card holders find that their entire paycheck goes to pay off past debts and the only way to survive is to incur more debt.

A quick perusal of the early chapters leads one to believe that the author is not totally neutral in her view of the credit industry, and she admits this in the first chapter. She states that she has long been in debt and has not been able to shield her family "from the ravages—the despair, depression, guilt, shame, insomnia, and nightmares—that plague a life in debt" (p. 7). The author has a background in working with the poor, having started out as an anthropologist exploring how migrant farmworkers in Illinois coped with poverty. After moving to Washington, D.C., where she teaches at American University, she has studied homelessness, urban renewal, public housing, race and poverty, and environmental justice. Despite writing from a biased perspective, the author still brings out many valid viewpoints regarding the impact of consumer debt on the American populace.

Virtually everyone uses credit to some extent, but Williams reminds us that the wealthy use credit in a profitable way, while the poor simply become poorer. Whereas the poor have to pay interest on their credit card debt, the wealthy can postpone paying for their purchases for nearly a month and earn interest on the money they are [End Page 767] not paying out immediately. They then pay the full balance at the end of the month, incur no interest charges, and also receive frequent flyer miles for their efforts.

Chapter 2 covers a history of consumer debt, particularly in the past half century. Although consumer credit has been a part of America's culture since the nation's founding, that credit was in the form of revolving payment terms offered by stores that would finance a customer until the crops came in or by consumer goods manufacturers (such as piano companies) who used credit as a selling tool. After World War II the growth of large department stores and shopping centers eliminated these and other credit practices used by smaller stores. Department stores soon began offering credit cards as a marketing tool. Banks then took over these department store credit cards. As with Diners Club and American Express, borrowers had to pay their monthly balances in full. In 1958 the first unsolicited BankAmericards (now Visa) were distributed—the first of nearly 100 million unsolicited cards that would be sent to recipients—including children, dogs, and decedents—by 1970.

Williams also brings into the discussion the Arab oil embargo of 1974, which caused gas prices to increase and consumers to pay for their gas with credit cards, and the federal Equal Credit Opportunity Act, which promised nondiscrimination on the basis of sex, marital status, race, and national origin. The growth in credit also led to the growth in related...

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