Buy Now Pay Later by Hillel Black late 40’s? I grew up in the forties when it was customary to save up for something if you wanted to buy it. Not that our parents were so virtuous; there was just no other way. By the time Hillel Black wrote this book, published in 1961, an explosion had occurred in the world of consumers. No more saving up! We had to have things right away whether we could afford them or not. The credit card, one of the chief detonators of this change, began in 1950. Hillel tells the story of Frank MacNamara, who went out to dinner, having carelessly left his wallet in his office. When it came time to pay, he was in for serious embarrassment. The next day he got together with some friends and formed the Diner’s Club – the first credit card.
Credit cards are only part of the story. Merchants caught on to a great vehicle for profit – selling debt. Department stores, furniture stores, and most prominently car dealerships got into the business of selling on time. Often the amount paid in interest exceeded the cost of the merchandise.
This could have been all right except that it became customary to conceal the true interest rate from the consumer by stating only the amount of the monthly payment. Sometimes a statement of the monthly interest rate obscured the actual annual interest rate. People found themselves over their heads; sometimes their only way out was suicide.
Anti-usury laws often did more harm than good. Few could secure loans meeting the standards of reputable low-interest institutions. In such conditions, loan sharks got toe holds and then became major (and ruthless) players.
I don’t know, but my guess is that credit is more firmly embedded in our way of doing business than it was sixty years ago. This book provides a picture of the amazing avarice in our species along with the very sad naiveté. Maybe Polonius’s much mocked platitude should actually be words to live by. Neither a borrower nor a lender be. If you are a lender, you risk losing your soul to greed. If you’re a borrower, you risk losing your shirt.
