Why We Have a Credit-Driven Culture

The American obsession for buying on credit has long been embedded in the national culture. However, many people do not realize just how far back such consumer practices go.

Already at the turn of the twentieth century, Americans were acquiring a buy-now, pay-later mentality. Marketing professor James A. Roberts reports that over the period 1898-1916, Americans doubled their purchases of high-ticket items such as automobiles and appliances. Many of these were bought on installment plans.

Roberts quotes historian Gary Cross who affirms that “by 1925, 70 percent of furniture, 75 percent of radios, 80 percent of phonographs, 80 percent of appliances, and 90 percent of pianos were purchased on the installment plan.” (James A. Roberts, Shiny Objects: Why We Spend Money We Don’t Have in Search of Happiness We Can’t Buy, New York: HarperOne, 2011, p. 32.)

Roberts notes the desire to acquire an automobile was a special inducement to installment buying with nearly 75 percent of all automobiles being bought on credit by 1924. In those early times, the passion to own an automobile was so great that “people were willing to sacrifice food, clothing, and even savings to own a car (p. 36).” Some even mortgaged their homes to acquire a car. Monthly payments often absorbed one week’s wages each month for the average working man.

Thus, it should be no surprise that modern consumers are so heavily indebted and that frenetic intemperance is so deeply entrenched in today’s economy. It is part of a culture that has been long in the making.


  • Francis Slobodnik

    Because of the way that our economy is set up it is often times necessary to purchase a house through a mortgage. Since an automobile has become a necessary form of transportation to and from work it might also be argued that it is reasonable to take out a loan for a purchase since it is an expensive investment.  What I see as frenetic is the insatiable desire to own not just one new car, but at least two new cars per household.  This is a total imbalance   If you need a loan buy a good low mileage used car that will last just as long as the new one with much lower cost.  Marketing has convinced people that a new car is a status symbol, but it isn’t, not if everyone else owns one.  A rational person looks for the best value for their money, the frenetic person looks for what they perceive to be benefits that in reality are non-existant.