"It's a catch 22": lived experiences of short-term, high-cost credit among low-income people in the neoliberal state

Abstract

This paper contributes to the literature of lived experiences in the neoliberal United States—the United States in times of deindustrialization, post-welfare, mass-incarceration, and mass-probation. The focus is on the question what role high-cost, short-term credit plays for low-income Americans to make ends meet. Through 20 in-depth interviews with economically-poor, working-poor, and near-poor Americans, this paper argues that credit behaviors and especially short-term, high-cost credit plays an important role in how Americans deal with precarious living conditions in the low-wage work-sector, and with limited welfare support. Especially precarious life events, for individuals or family members, as health care emergencies, job loss, or involvement with the criminal justice system lead to use of high-cost credit for short term fixes, as well as to manage the often long lingering ‘outfall’ of emergencies. This study also tries to complicate the perspective of ‘optimal credit usage’ for the economically-poor by echoing the convoluted lives the participant describe. Furthermore, the paper argues that credit—alongside work and consumption—has become an important part of how people make sense of themselves and construct identities. I outline here how participants internalize and resist narratives about appropriate credit and financial behaviors for low-income people.