Consuming by Installments: The Rise of Retail Credit

Abstract

Within this chapter, we will examine the development of retail installment credit in the nineteenth century and the ways in which it manifests a significantly different history to the practices of small loans that we have already looked at. Fundamentally, retail credit was not understood by American courts to be a credit transaction in the same way that cash borrowing and pawnbroking were. It was developed by small retailers as a way of boosting sales to consumers and defending market share, with many department stores and the main catalog merchants initially shunning it as a disreputable practice. This parallels how commercial small loan providers were dismissed as contemptible usurers and their customers feckless or vulnerable. And just like the small loan business, this aloofness was not to be maintained. We will see how borrowers were governed by sellers, not only through the rigorous organization of time and money payments but also through the assessed will of the borrower.