A Visa card is the closest thing we have to a universal currency. If you have one, you can charge at more than 16 million places in 300 countries. It has been called "a magical piece of plastic."
But the magic of credit cards is wildly out of control, says Robert D. Manning in Credit Card Nation: The Consequences of America's Addiction to Credit (Basic Books, 2000, $26) Manning was on PBS recently and described himself as an economic sociologist. He has studied the history of credit cards, their use and abuse, and the personal problems, even tragedies, that result when debt gets oppressive.
On KOSU, the local public radio station, he talked mostly about college students and credit, and in the book he tells of the case of a 22-year-old Oklahoma University student who committed suicide because of his gigantic debt. He had 12 credit cards, the usual ones plus cards from Neiman-Marcus and Saks too. A year after his death his mother still gets calls from collectors.
In what the author calls the "student loan generation" nearly all college students have to go into debt to finish their degrees. It's usual for them to leave college with a big debt just as they are trying to finance marriage and house buying or other adult demands on their money . During the 1990s he says college students borrowed more than $140 billion. Isn't there government aid available to help? I was surprised to learn that 80% of federal aid to college students is in the form of student loans, and ironically many students use the loan money to pay on their credit cards.
And more irony comes in the story of Cris, a female student who went to college and soon owed over $20,000 on various credit cards. It took her a long time and bankruptcy to realize she was always spending more than her income. And what was she majoring in? Accounting.
Money problems arising from too much debt are not limited to the young, of course. The same need to live better, even if it means living beyond one's means, is found in people of all ages. I have noticed that many writers on the subject of debt talk about our old Puritan heritage of thrift and its violation, as if they don't realize that there has always been a debtor class, even debtors' prisons. Now that would be a growth industry, building prison space for everyone who owes money.
Manning blames both consumers and the banking industry for creating the Credit Card Nation. Credit cards became profitable to banks after the banking deregulation of the 1980s, and they started marketing them to everyone. Recently I received an offer from Visa to expand my credit line to $30,000. It took me a split second to send that baby to my wastebasket, above which I always sort my mail. I really like the author's advice which is simple. When given a choice between paper and plastic, always say "Paper!"
Alvena Bieri is a writer in Stillwater, Okla. Editor's Note: Versions of a bill to make it much more difficult to clear debts through bankruptcy has passed both chambers of Congress but is awaiting House action on Senate amendments.