Conservatives blame the general decline of financial rectitude. Consumer credit used to be what small merchants extended to a few trusted customers. Merchants didn't extend much, because it cost a lot to manage debt intelligently. In our generation, the card swipe and the computer network behind it have allowed national providers to take over the credit market. They waste no time on clumsy personal relationships.
Credit is manufactured out of the statistics of huge financial databases.
Debt collection is almost equally automated and anonymous. Price regulation is gone, too. California's usury laws can't be enforced against cards issued by Citibank from South Dakota. Banks charge 10 or 15 percentage points more to lend than it costs them to borrow. Credit cards, in short, have created a thriving new market for personal junk bonds.