Debt for Sale: A Social History of the Credit Trap

by Brett Williams

Book Overview

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,...

• Format: Hardcover
• Language: English
• ISBN: 0812238176
• ISBN13: 9780812238174
• Release Date: August 2004
• Publisher: University of Pennsylvania Press
• Length: 160 Pages
• Weight: 0.80 lbs.
• Dimensions: 0.8" x 5.8" x 8.7"

Customer Reviews

Mouse On A Wheel

In "Debt for Sale" Brett Williams examines the history of debt in America and focuses on the many tenets of the Debt Industry. Debt is not only a financial phenomenon but also a social and cultural one heavily embedded into U.S. society. The Debt Industry is a very sophisticated, organized, methodical, and politically powerful industry in America. Close to 70% of the American economy is now propelled and highly dependent upon, consumer spending. As fixed expenses (expenses we have to pay) increase and take more and more out of the average American's income, Americans are increasingly, spending and borrowing --> borrowing to spend. A high percentage of Americans are now using debt for "cost of living" and not soley for crass, mass consumption. This has become increasingly common for the middle class. <br /> <br />There's also the ignorant and myopic: <br />In 2007 the ARM mortgage payments will increase we'll be hearing more and more of the people who used them. :) <br /> <br />Most of us have been in these debt situations. I certainly have. But the degree and size of this situation is what has been increasing dramatically, in particular over the last 2 decades. Debt can help us in many ways (Good debt). However, one question to ask is: how did the *size* (per capita debt ratios) get so big? <br /> <br />Williams discusses how debt is now arguably one of the most pervasive aspects in American society. Yet it seems real discourse regarding it is rarely if ever discussed. If there is discussion, it remains on the superficial level of TV talk shows, and newspapers and web articles that redundantly regurgitate "How to get out of debt" or "How to dig your way out of the hole." "Cut up your cards, pay off the higher interest rates first, establish a budget, itemize all expenses." And, "cut down on the Cappuccino from 5 days a week to two. You'll save X amount of dollars per year this way." <br /> <br />Perhaps the question should be not "how" (to dig out of it) but "why" it is there in the first place. Per capita has debt grown so much in the last 20 years that simply 'living beyond one's means' is not the main factor, for many. Further anchoring (revolving) debt into lifestyle normalcy is potential employers running credit checks on non-financially sensitive positions being applied for by job applicants. <br /> <br />In many instances, the FICO score has become an almighty determiner about "who a person is." Further confusing the already bemused, are the Self-anointed pop culture gurus and money management helpers who rarely if ever ask the "why" questions, as well. Of course there is good debt, and borrowing can help us in many ways. Obviously, most of us cannot pay cash for certain necessities, such as the car we need to commute to work. (In the U.S. a car is a necessity in most areas.) <br /> <br />Excluding the Mortgage and Car Loan, (and in many instances including these 2 debts) one could look at the concept of Ame

Debt for Sale

"Your account is now delinquent in the amount of $40.00. Until your account is current and below your established credit line, we must insist that you do not use your card. We must inform you that failure to make at least the minimum monthly payment will leave us no other alternative but to turn your account over to our Collection Attorneys. Please be advised your account is also being reported as delinquent to a local credit bureau. Key Federal Savings Bank." (107) All this heckling is the name of $40. Imagine you are in the shoes of Will Harrison suffering from diabetes with two amputated legs that opened his own small flower shop years ago and owed $1,000 a month in interest payments alone. Imagine you are Megan of whom half of her earnings go to pay the minimum of each of credit card bills who has a girlfriend screen her calls as she is terrified of the collection agencies and is depressed as a result of her debt. What a depressing, demoralizing, and humiliating toll the credit industry is taking on the poor of our country. These are the stories of exploitation that Brett Williams recounts in her newest book Debt for Sale: A Social History of the Credit Trap. Williams is clear from the very onset that she is making no attempts at neutrality and objectivity; she is simply telling it like it is, or at least the way she thinks it is. She herself suffers from massive credit debt. And yes, the language of suffering and victimization saturate this expose. The institutions, the government, even the consumer culture are to blame in this book for the downfall of the American poor and lower middle class. She uses the tragic tales of the few to stand in for the exploitation and suppression of the masses at the benefit of these ambiguous, all encompassing, and greedy financial entities, who ironically are the major source for employment in the US's new service sector economy. Despite this irony, the book is well put together in its explanations about how creditors, whether credit card companies, cash checking facilities, pawn shops, or mortgage brokers, exploit notions of American entitlement to freedom, choice, flexibility, and materialism in order to pedal their products. Our story begins in the 1970s when credit and debt became "the engine of the US economy." Through acquisitions, mergers, improvements in technology and communication, the financial services and credit industry has boomed and enabled the wealthy to become wealthier while feeding on the misfortune and inability of repayment of the poor debtors. Attempts have been made in constraining these financial giants such as Senator D'Amato's push for a 14% cap on usury, but have mostly been defeated through the rhetoric of credit as the new welfare, enabling the poor to get by when even their own government was not there to support them. Williams demonstrates the cyclical damage that the credit industry has laid upon the less fortunate through treating those who pay their bills and do not carry

Credit: The Reverse of a Modern Day Robin Hood

It might be our biggest problem, but Americans still are not talking about it. Although high levels of debt have become widely prevalent in the United States, American social conventions prohibit most discussion of personal financial troubles. Instead, this downward spiral into debt silently worsens during economic hardships, through "people's desperate, sometimes misguided, often inescapable efforts to maintain the illusion of a middle-class standard of living." (43) With 1.2 million people filing for bankruptcy in 1996, (60) the lack of a productive conversation about issues of debt and credit is startling. Debt for Sale: A Social History of the Credit Trap is Brett Williams' attempt to change that. Her anthropological work indicts the booming debt industry for its unscrupulous role in creating massive profits for lenders by hammering poor Americans deeply into debt. Rather than blaming the indebted, she attacks the lending institutions for their predatory tactics and deceitful business practices, which she insists brought about such unnecessary adversity for so many people. Brett Williams is a professor of anthropology at American University in Washington D.C. She has lived in the nation's capital since 1976, where she has researched a variety of topics related to urban politics and poverty. She is also "an unwilling participant-observer in the social relations [she describes]." (7) Having used credit cards since arriving in D.C., she has experienced difficult times of debt and makes no attempts at neutrality in this work. This aspect is refreshing, as the author devotes her entire energy to exposing the damage wrought by the credit industry without pretending to be objective. With that said, the author backs up her statements with carefully researched detail, so despite its lack of a neutral stance, this book is still firmly based in experience and statistics. Debt for Sale is a powerfully surprising presentation of the credit industry as an exploiter of poorer Americans. Williams explains that, unexpectedly, credit companies prefer consumers who can not pay off their entire balance every time it is due. Instead, they seek those who are unable to handle their usual balance and impose "a creative plague of penalty fees for every little malfeasance imaginable." (33) Because these punishments provide so much profit for the banks, people who pay too faithfully are avoided by companies like Capital One, where "your account may be cancelled if you don't charge enough or if you pay too fully and faithfully." (50) This seemingly illogical structure sets the tone for the book as a meticulous revelation of the many ways that banking methods defy reason. This book compellingly describes an American economy based in a self-reinforcing set of inequalities, slanted heavily toward the rich. Not only do the banks market their products less aggressively toward people more able to pay, they also give those people better credit cards deals. Ra