1
00:00:06,120 --> 00:00:07,960
[electronic beeping, buzzing]

2
00:00:08,040 --> 00:00:09,440
[indistinct chatter]

3
00:00:11,000 --> 00:00:12,680
{\an8}One hundred and seventy million.

4
00:00:13,200 --> 00:00:14,800
{\an8}[speaks Chinese]

5
00:00:14,880 --> 00:00:17,200
{\an8}[narrator] It's April 2014,

6
00:00:17,280 --> 00:00:19,120
and at a Hong Kong auction,

7
00:00:19,200 --> 00:00:22,760
billionaire art collector
Liu Yiqian is bidding

8
00:00:22,840 --> 00:00:25,040
on a rare Ming Dynasty porcelain cup.

9
00:00:26,920 --> 00:00:29,480
{\an8}Fair warning… Sold!

10
00:00:30,480 --> 00:00:32,200
[narrator] Liu's bid wins.

11
00:00:33,160 --> 00:00:36,640
This chicken cup has broken
the world record for Chinese art.

12
00:00:36,720 --> 00:00:39,480
It has fetched 36 million US dollars.

13
00:00:40,080 --> 00:00:42,120
[narrator] And how's he paying for it?

14
00:00:42,200 --> 00:00:45,440
With his American Express Centurion card,

15
00:00:45,520 --> 00:00:47,960
an exclusive card for the superrich.

16
00:00:49,480 --> 00:00:50,560
Today,

17
00:00:50,640 --> 00:00:52,480
we live on borrowed money.

18
00:00:53,080 --> 00:00:55,120
Credit is a way of life.

19
00:00:57,880 --> 00:01:01,360
There are half a billion credit cards
in the US alone.

20
00:01:02,200 --> 00:01:05,600
That's an average of two
for every American adult.

21
00:01:06,640 --> 00:01:07,960
And around the globe,

22
00:01:08,040 --> 00:01:12,080
there are about
470 billion card transactions a year.

23
00:01:13,120 --> 00:01:16,240
That's more than the number
of stars in the Milky Way.

24
00:01:17,280 --> 00:01:21,160
Total credit-card debt
in the United States in 2020

25
00:01:21,240 --> 00:01:23,520
is $820 billion.

26
00:01:24,760 --> 00:01:28,000
If that was laid out end to end
in one-dollar bills,

27
00:01:28,520 --> 00:01:32,280
it would measure almost the distance
from Earth to the Sun.

28
00:01:35,600 --> 00:01:39,920
This tiny, humble piece of plastic
has changed the global economy

29
00:01:40,000 --> 00:01:42,240
and the way we live forever.

30
00:01:42,880 --> 00:01:44,200
But more than that,

31
00:01:44,280 --> 00:01:49,360
credit cards might be rewiring our brains,
getting us more addicted to spending.

32
00:01:51,080 --> 00:01:53,800
So is the credit card our flexible friend?

33
00:01:54,800 --> 00:01:57,120
Or are we its servant?

34
00:01:57,200 --> 00:01:59,160
[eerie music playing]

35
00:02:09,200 --> 00:02:11,200
{\an8}-[static crackles]
-[crowd cheering]

36
00:02:11,800 --> 00:02:13,600
{\an8}At the end of World War II,

37
00:02:13,680 --> 00:02:17,320
{\an8}the United States is
the world's greatest military power…

38
00:02:19,480 --> 00:02:21,520
and the richest nation in history.

39
00:02:23,600 --> 00:02:27,440
The economy booms
as factories pivot from a wartime footing

40
00:02:27,520 --> 00:02:29,280
to churning out consumer goods.

41
00:02:30,080 --> 00:02:31,360
Never before

42
00:02:31,440 --> 00:02:36,080
have ordinary people been given the chance
to buy such unheard-of luxuries.

43
00:02:39,720 --> 00:02:43,000
♪ A brand-new sink, a built-in oven ♪

44
00:02:43,080 --> 00:02:46,120
♪ A new refrigerator and a phone ♪

45
00:02:46,200 --> 00:02:49,200
♪ A kitchen phone, a bright red phone ♪

46
00:02:50,200 --> 00:02:52,760
[narrator] But buying
that fancy kitchen gadget or car

47
00:02:52,840 --> 00:02:55,240
straight from the showroom is expensive,

48
00:02:55,840 --> 00:03:00,400
and that means many of the new goods
are out of reach for ordinary people.

49
00:03:01,640 --> 00:03:02,960
After all,

50
00:03:03,040 --> 00:03:05,880
Americans who grew up
during the Great Depression

51
00:03:05,960 --> 00:03:07,880
know the value of pinching their pennies.

52
00:03:08,680 --> 00:03:09,720
[car horns beep]

53
00:03:09,800 --> 00:03:12,960
That all changes in New York in 1950.

54
00:03:17,080 --> 00:03:20,480
Businessman Frank McNamara
has an embarrassing night out

55
00:03:20,560 --> 00:03:23,480
at a Manhattan restaurant
where he forgets his wallet.

56
00:03:24,440 --> 00:03:27,600
{\an8}The next time he visits,
he brings a cardboard card

57
00:03:27,680 --> 00:03:30,520
{\an8}that promises payment but at a later date.

58
00:03:31,200 --> 00:03:33,600
He calls it a Diners Club Card.

59
00:03:34,800 --> 00:03:36,160
In other words,

60
00:03:36,240 --> 00:03:39,040
"Buy what you want now,
but pay for it later."

61
00:03:41,600 --> 00:03:44,400
It turns out
a lot of people like the sound of that.

62
00:03:44,480 --> 00:03:46,960
[keys clack]

63
00:03:47,040 --> 00:03:49,360
In its first year of operation,

64
00:03:49,440 --> 00:03:53,680
42,000 people subscribe
to McNamara's credit card,

65
00:03:53,760 --> 00:03:58,160
and the company rushes to enlist
the cooperation of rental-car companies…

66
00:03:58,240 --> 00:03:59,080
Hello?

67
00:03:59,160 --> 00:04:00,960
…hotels and restaurants.

68
00:04:02,080 --> 00:04:04,720
[man] A booklet is provided with the card

69
00:04:04,800 --> 00:04:08,680
listing the cooperating establishments
where they will be honored.

70
00:04:08,760 --> 00:04:13,560
Many of the cooperating establishments
are in the high-priced luxury category.

71
00:04:15,120 --> 00:04:18,240
[narrator] Diners Club
actually works as a charge card.

72
00:04:18,320 --> 00:04:21,240
It makes money by charging
an annual membership fee

73
00:04:21,320 --> 00:04:23,840
and getting a small commission
on each transaction

74
00:04:23,920 --> 00:04:26,680
from participating stores and restaurants.

75
00:04:28,200 --> 00:04:29,440
It shows the banks

76
00:04:29,520 --> 00:04:32,480
there's money to be made
in these newfangled cards.

77
00:04:33,480 --> 00:04:36,760
So how can they persuade
the rest of us that we want one?

78
00:04:39,080 --> 00:04:43,160
{\an8}A senior executive at the Bank of America,
Joseph P. Williams,

79
00:04:43,240 --> 00:04:44,480
has a bright idea.

80
00:04:47,040 --> 00:04:48,360
In 1958,

81
00:04:48,880 --> 00:04:52,280
Williams signs up merchants
in Fresno, California,

82
00:04:52,360 --> 00:04:54,680
to honor his new BankAmericard.

83
00:04:54,760 --> 00:04:56,040
[horn honks]

84
00:04:56,120 --> 00:04:59,520
Then he mails out 60,000 unsolicited cards

85
00:04:59,600 --> 00:05:02,200
to the unsuspecting citizens of Fresno.

86
00:05:02,280 --> 00:05:03,120
[paper rustles]

87
00:05:03,200 --> 00:05:07,080
People love their new cards,
and by the end of the following year,

88
00:05:07,160 --> 00:05:09,760
he's sent out two million
throughout the state.

89
00:05:10,520 --> 00:05:11,800
But whoops,

90
00:05:11,880 --> 00:05:14,480
more than one in five people
with the new card

91
00:05:14,560 --> 00:05:16,440
never pay back what they owe.

92
00:05:17,000 --> 00:05:20,000
The bank loses nearly $9 million,

93
00:05:20,080 --> 00:05:22,200
and Williams resigns.

94
00:05:22,800 --> 00:05:23,720
[thud]

95
00:05:26,600 --> 00:05:30,160
And yet people are starting
to use such cards.

96
00:05:30,680 --> 00:05:32,040
That same year,

97
00:05:32,120 --> 00:05:34,960
US financial giant American Express

98
00:05:35,040 --> 00:05:38,080
issues 250,000 charge cards.

99
00:05:38,760 --> 00:05:39,880
And BankAmericard?

100
00:05:40,560 --> 00:05:42,880
Losing that $9 million was a blip.

101
00:05:43,400 --> 00:05:47,440
It's soon recognized
as the first all-purpose credit card

102
00:05:47,520 --> 00:05:49,960
and is later renamed Visa.

103
00:05:50,600 --> 00:05:54,000
Of course, as credit cards take off,
there's a catch.

104
00:05:54,520 --> 00:05:57,480
Fail to pay your bill in full
at the end of the month,

105
00:05:57,560 --> 00:06:00,000
and you'll be charged interest
on what's owed.

106
00:06:00,520 --> 00:06:02,760
And that can get very expensive.

107
00:06:04,880 --> 00:06:09,240
Today, the US average annual interest rate
paid for credit cards

108
00:06:09,320 --> 00:06:11,040
is almost 16%.

109
00:06:11,880 --> 00:06:16,520
Let's say you use your card
to buy a used car for $10,000

110
00:06:16,600 --> 00:06:19,680
but only pay the minimum
of $150 each month.

111
00:06:20,200 --> 00:06:23,840
You'll end up paying
over $14,000 in interest

112
00:06:23,920 --> 00:06:26,880
on top of the $10,000 you owe for the car.

113
00:06:27,840 --> 00:06:29,840
For that extra $14,000,

114
00:06:29,920 --> 00:06:31,400
you could have bought

115
00:06:31,480 --> 00:06:33,080
{\an8}a second used car

116
00:06:33,680 --> 00:06:36,640
{\an8}plus a week-long cruise
around the Caribbean

117
00:06:37,280 --> 00:06:38,960
and an electric bike

118
00:06:39,480 --> 00:06:42,240
and a three-month Eurorail pass

119
00:06:42,760 --> 00:06:47,400
and still have enough to attend
25 games of the Boston Red Sox.

120
00:06:48,080 --> 00:06:48,920
[bat clinks]

121
00:06:49,000 --> 00:06:50,440
[cheering and applause]

122
00:06:50,520 --> 00:06:55,080
Perhaps that's why banks are so eager
to get people hooked on credit cards.

123
00:06:56,680 --> 00:06:59,240
{\an8}[man] The young and affluent
feed the credit-card boom.

124
00:06:59,320 --> 00:07:00,600
Enjoy now, pay later.

125
00:07:01,120 --> 00:07:03,960
Those little plastic rectangles
will get you almost anything.

126
00:07:05,880 --> 00:07:07,400
[narrator] But in those early days,

127
00:07:07,480 --> 00:07:10,680
making a credit-card purchase
is not for the impatient.

128
00:07:12,560 --> 00:07:14,800
The store clerk has to phone the bank,

129
00:07:14,880 --> 00:07:18,960
which in turn must contact the card issuer
before the transaction is approved.

130
00:07:19,640 --> 00:07:21,680
[phone rings]

131
00:07:21,760 --> 00:07:23,720
Better hope they pick up the phone.

132
00:07:24,760 --> 00:07:27,840
The solution comes in the mid-1960s.

133
00:07:27,920 --> 00:07:30,320
IBM engineer Forrest Parry

134
00:07:30,400 --> 00:07:34,880
is trying to figure out a way
to produce secure identity cards for…

135
00:07:34,960 --> 00:07:35,800
Wait for it.

136
00:07:36,400 --> 00:07:37,760
{\an8}…the CIA.

137
00:07:39,920 --> 00:07:42,840
One evening,
he comes home with a plastic card

138
00:07:42,920 --> 00:07:46,320
and information encoded
on a stripe of magnetic tape.

139
00:07:47,320 --> 00:07:50,640
He'd like to attach one to the other,
but how to do it?

140
00:07:52,320 --> 00:07:55,520
It's his wife, Dorothea,
who comes up with the idea.

141
00:07:56,040 --> 00:07:59,160
She's ironing at the time
and hands him the iron.

142
00:07:59,240 --> 00:08:00,080
"Try this."

143
00:08:01,320 --> 00:08:04,240
The combination of heat
and pressure from the iron

144
00:08:04,320 --> 00:08:07,200
seals the magnetic stripe
onto the plastic card.

145
00:08:09,720 --> 00:08:10,680
From then on,

146
00:08:10,760 --> 00:08:15,480
the credit card is made in exactly
the same way as a secret agent's ID.

147
00:08:16,560 --> 00:08:19,160
The financial details
of the credit-card owner

148
00:08:19,240 --> 00:08:22,080
are electronically stored
on the magnetic stripe.

149
00:08:23,200 --> 00:08:25,240
Swipe the card through a reader,

150
00:08:25,320 --> 00:08:30,080
a magnetic head inside the reader detects
the magnetic field the stripe generates,

151
00:08:31,280 --> 00:08:33,880
relays it back
to the bank's central computer,

152
00:08:35,440 --> 00:08:37,000
and the sale is complete.

153
00:08:40,160 --> 00:08:43,640
Still, credit cards
are mainly used in the US.

154
00:08:45,120 --> 00:08:46,680
That's all about to change.

155
00:08:51,080 --> 00:08:52,800
[jazz music playing]

156
00:08:52,880 --> 00:08:55,840
{\an8}It's Swinging London, 1966.

157
00:08:57,520 --> 00:08:59,320
{\an8}Just like the Americans,

158
00:08:59,400 --> 00:09:02,360
{\an8}the Brits find there's lots
of shiny new things to buy.

159
00:09:03,560 --> 00:09:06,920
[man] Designer Mary Quant is just one
of the breakaway generation

160
00:09:07,000 --> 00:09:09,160
who has now dreamed up
a revolutionary approach

161
00:09:09,240 --> 00:09:10,560
to young cosmetics,

162
00:09:10,640 --> 00:09:13,400
which even department stores
like Selfridges have taken up.

163
00:09:16,000 --> 00:09:16,920
{\an8}[narrator] In Britain,

164
00:09:17,000 --> 00:09:20,440
many people still regard
personal debt as shameful.

165
00:09:23,320 --> 00:09:27,520
So Barclays Bank sends out
over a million Barclaycards,

166
00:09:27,600 --> 00:09:31,680
a licensed version of BankAmericard,
to select account holders.

167
00:09:32,920 --> 00:09:35,360
It's pitched as an exclusive offer.

168
00:09:39,080 --> 00:09:42,000
[man] Remember that apart
from buying goods and services,

169
00:09:42,080 --> 00:09:45,000
the Barclaycard can also be used
to borrow cash

170
00:09:45,080 --> 00:09:46,960
from any branch of Barclays Bank.

171
00:09:48,000 --> 00:09:50,360
[narrator] Marketing the card
as a status symbol

172
00:09:50,440 --> 00:09:52,360
is the key that unlocks the door,

173
00:09:52,440 --> 00:09:55,080
changing British attitudes forever.

174
00:09:57,120 --> 00:09:58,360
[disco music playing]

175
00:09:58,440 --> 00:09:59,880
And back in the US,

176
00:09:59,960 --> 00:10:02,680
no one's putting much money away
for a rainy day.

177
00:10:05,280 --> 00:10:07,160
{\an8}By 1979,

178
00:10:07,240 --> 00:10:11,080
{\an8}Americans are saving just 10%
of their disposable income.

179
00:10:13,080 --> 00:10:17,280
It turns out
people really like instant gratification.

180
00:10:18,160 --> 00:10:19,640
Perhaps a bit too much.

181
00:10:23,800 --> 00:10:28,000
{\an8}Studies show that when people pay
for high-end goods with a credit card,

182
00:10:28,080 --> 00:10:31,360
{\an8}they're prepared to pay
up to 100% more than with cash.

183
00:10:31,440 --> 00:10:33,360
{\an8}[metal crunches, glass shatters]

184
00:10:35,240 --> 00:10:36,360
Reportedly,

185
00:10:36,440 --> 00:10:40,520
McDonald's customers spend 55% more
when using a credit card.

186
00:10:41,240 --> 00:10:43,920
That's like adding a large fries
to your Big Mac

187
00:10:44,000 --> 00:10:46,240
every time you pay with a credit card.

188
00:10:46,320 --> 00:10:48,360
[food squelching]

189
00:10:48,440 --> 00:10:49,840
In the grocery stores,

190
00:10:49,920 --> 00:10:53,280
shoppers using credit cards
check out with bigger baskets…

191
00:10:53,360 --> 00:10:55,200
[products clatter]

192
00:10:55,280 --> 00:10:58,360
…and they make more indulgent
and impulsive purchases.

193
00:10:58,880 --> 00:11:01,520
[car engine revs]

194
00:11:04,320 --> 00:11:06,160
{\an8}But by the mid-1980s,

195
00:11:06,240 --> 00:11:07,960
there's no going back.

196
00:11:08,560 --> 00:11:10,600
Diners Club Cards, Amex,

197
00:11:10,680 --> 00:11:13,600
Visa, and MasterCard
are honored around the globe.

198
00:11:15,040 --> 00:11:17,880
And many countries
now produce their own cards.

199
00:11:19,360 --> 00:11:21,880
Even the Soviet Union gets in on the act

200
00:11:21,960 --> 00:11:24,960
when local banks issue
a version of the Visa card

201
00:11:25,040 --> 00:11:26,560
known as the SovCard.

202
00:11:27,560 --> 00:11:28,960
And in the West,

203
00:11:29,520 --> 00:11:33,680
it's the era of the yuppie,
the young urban professional,

204
00:11:35,480 --> 00:11:37,480
where anyone with ambition

205
00:11:37,560 --> 00:11:40,600
can have a sports car
complete with its own phone,

206
00:11:41,120 --> 00:11:43,240
a top-of-the-range VCR,

207
00:11:44,000 --> 00:11:47,240
a remote-control TV, and cassette player.

208
00:11:48,440 --> 00:11:51,120
And everyone wants expensive vacations.

209
00:11:54,040 --> 00:11:57,040
All paid for
by that little piece of plastic.

210
00:12:04,200 --> 00:12:06,800
[man] Many of these people
couldn't really afford this holiday,

211
00:12:06,880 --> 00:12:09,840
so they booked by credit card
to defer the expense.

212
00:12:09,920 --> 00:12:10,960
It'll catch up with them,

213
00:12:11,040 --> 00:12:13,280
but they're not letting that
stand in their way.

214
00:12:13,880 --> 00:12:16,200
[bleeping]

215
00:12:16,280 --> 00:12:17,680
{\an8}[narrator] By 1986,

216
00:12:17,760 --> 00:12:22,040
{\an8}Americans owe around $110 billion
on their credit cards.

217
00:12:23,400 --> 00:12:25,080
{\an8}That's about 1,000 times

218
00:12:25,160 --> 00:12:28,640
{\an8}what Live Aid raised for famine
in Africa the previous year.

219
00:12:31,520 --> 00:12:32,720
Five years later,

220
00:12:32,800 --> 00:12:36,760
it will almost double
to about $205 billion.

221
00:12:41,440 --> 00:12:44,760
So, debt is all bad, right?

222
00:12:44,840 --> 00:12:47,520
Well, yes and no.

223
00:12:47,600 --> 00:12:49,720
Debt also fuels growth.

224
00:12:51,560 --> 00:12:54,360
The financial services industry explodes,

225
00:12:54,440 --> 00:12:57,520
{\an8}creating jobs for hundreds
of thousands of people.

226
00:12:59,080 --> 00:13:01,960
In the 1990s, the retail sector booms,

227
00:13:03,760 --> 00:13:06,920
helping to fuel
extraordinary growth in the economy.

228
00:13:08,800 --> 00:13:10,480
[reporter] The high-street consumer boom

229
00:13:10,560 --> 00:13:12,600
wouldn't have happened
without credit cards.

230
00:13:12,680 --> 00:13:15,640
In Britain now,
13 million people pay with plastic.

231
00:13:16,560 --> 00:13:18,960
[narrator] Multimillion-dollar
construction projects

232
00:13:19,040 --> 00:13:20,880
rely on credit to get started.

233
00:13:21,560 --> 00:13:24,040
Want to buy a house or open a business?

234
00:13:24,120 --> 00:13:27,000
Good luck doing that
without a mortgage or loan.

235
00:13:27,840 --> 00:13:31,160
So, debt might be bad for individuals,

236
00:13:31,240 --> 00:13:33,760
but it can be great
for the economy as a whole.

237
00:13:35,440 --> 00:13:37,840
Now that credit cards are everywhere,

238
00:13:37,920 --> 00:13:42,120
companies find themselves competing
for a smaller pool of new customers.

239
00:13:43,400 --> 00:13:45,640
So they add perks to the credit cards.

240
00:13:46,200 --> 00:13:49,120
Reward programs like frequent-flier miles

241
00:13:49,200 --> 00:13:51,480
or hotel and rental-car points.

242
00:13:52,680 --> 00:13:55,680
But sometimes
they're not terribly discerning

243
00:13:55,760 --> 00:13:56,920
about whom they target.

244
00:13:57,000 --> 00:13:59,880
[kids] ♪ …diamond in the sky… ♪

245
00:13:59,960 --> 00:14:02,080
[reporter] Three-year-old
Alessandra Scalise

246
00:14:02,160 --> 00:14:04,080
is a Visa Platinum Card member.

247
00:14:04,160 --> 00:14:06,720
[narrator] When little Alessandra
of Rochester, New York,

248
00:14:06,800 --> 00:14:09,280
gets a credit-card application
in the mail,

249
00:14:09,360 --> 00:14:11,960
her mom fills it out
as a joke and mails it in.

250
00:14:12,920 --> 00:14:15,600
The tiny tot soon has her own credit card

251
00:14:15,680 --> 00:14:17,640
with a $5,000 credit limit.

252
00:14:18,680 --> 00:14:21,400
[reporter] The only place
this Visa card member wants to be

253
00:14:21,480 --> 00:14:22,800
is near her mommy,

254
00:14:22,880 --> 00:14:25,080
who will teach her
all about money and credit

255
00:14:25,160 --> 00:14:26,120
when she's older.

256
00:14:26,200 --> 00:14:28,800
[woman] If you're gonna charge,
you better have the money to pay.

257
00:14:29,320 --> 00:14:32,240
[narrator] Clearly, there's
little checking who can pay it back

258
00:14:32,320 --> 00:14:33,360
and who can't.

259
00:14:36,480 --> 00:14:37,920
By the year 2000,

260
00:14:38,000 --> 00:14:42,440
total credit-card debt
in America reaches $580 billion.

261
00:14:43,720 --> 00:14:48,280
That's the cost of staging
the Sydney Olympics 121 times.

262
00:14:49,520 --> 00:14:50,640
[flames whoosh]

263
00:14:51,720 --> 00:14:54,480
Many people are spending money
they may not have,

264
00:14:54,560 --> 00:14:56,840
packing on personal debt,

265
00:14:56,920 --> 00:15:00,880
and with the arrival of the Internet,
that's only going to get worse.

266
00:15:00,960 --> 00:15:03,920
Because once online,
you can shop till you drop

267
00:15:04,640 --> 00:15:05,960
from your sofa.

268
00:15:06,040 --> 00:15:08,440
Everything from books and clothes

269
00:15:08,520 --> 00:15:10,280
to a brand-new car,

270
00:15:10,360 --> 00:15:13,040
and all available
at the touch of a button,

271
00:15:13,120 --> 00:15:15,840
enabled by that tiny piece of plastic,

272
00:15:15,920 --> 00:15:16,960
the credit card,

273
00:15:17,480 --> 00:15:20,320
leaving brick-and-mortar stores
out in the cold.

274
00:15:21,600 --> 00:15:25,480
[reporter] At last, good news
for retailers of a bumper sales day.

275
00:15:25,560 --> 00:15:28,960
The problem for the high street
is that it wasn't happening here.

276
00:15:29,040 --> 00:15:31,080
It was Christmas on the keyboards

277
00:15:31,160 --> 00:15:34,360
on what the Internet industry
called Mega Monday.

278
00:15:36,800 --> 00:15:38,200
[narrator] By 2008,

279
00:15:38,280 --> 00:15:43,800
total credit-card debt in the US
reaches a record high of $870 billion.

280
00:15:44,920 --> 00:15:47,160
That's $500 billion more

281
00:15:47,240 --> 00:15:50,320
{\an8}than the US spent that year on the Army,

282
00:15:50,400 --> 00:15:53,080
{\an8}Air Force, and Navy combined.

283
00:15:59,080 --> 00:16:00,280
And yet,

284
00:16:01,400 --> 00:16:04,040
ready credit is still widely available.

285
00:16:04,960 --> 00:16:07,680
Almost anyone can have it,
whatever their income.

286
00:16:10,600 --> 00:16:12,560
Our changed attitude towards debt

287
00:16:12,640 --> 00:16:16,960
leads banks to offer mortgages to people
with low incomes and little savings,

288
00:16:17,040 --> 00:16:19,520
and those people
to snap up those mortgages

289
00:16:19,600 --> 00:16:21,520
with no way of paying them back.

290
00:16:22,720 --> 00:16:23,560
Who cares?

291
00:16:23,640 --> 00:16:25,880
It's just numbers on a piece of paper.

292
00:16:27,560 --> 00:16:30,440
It all comes to a head in 2008.

293
00:16:33,080 --> 00:16:35,960
[woman] This is what
financial Armageddon looks like.

294
00:16:36,040 --> 00:16:39,240
Red screens that scream,
"Sell, sell, sell."

295
00:16:40,480 --> 00:16:44,480
[narrator] It turns out those mortgages
aren't just numbers on a piece of paper.

296
00:16:44,560 --> 00:16:46,360
[men shout]

297
00:16:46,440 --> 00:16:48,360
And when money owed can't be paid back,

298
00:16:48,960 --> 00:16:51,400
the whole system comes crashing down,

299
00:16:53,080 --> 00:16:56,320
sparking the biggest
global financial crisis

300
00:16:56,400 --> 00:16:58,120
since the Great Depression.

301
00:17:01,960 --> 00:17:06,480
So has the great crash of 2008
ended our love of borrowing money?

302
00:17:09,080 --> 00:17:10,040
Of course not.

303
00:17:11,120 --> 00:17:13,040
Where's the recession?
Everybody's shopping.

304
00:17:13,120 --> 00:17:15,160
It's just the credit cards.
That's what it is.

305
00:17:15,240 --> 00:17:17,680
They're charging it,
and they'll feel it in a month or two.

306
00:17:17,760 --> 00:17:20,600
-When the bills come home.
-You don't feel it when you swipe it.

307
00:17:23,040 --> 00:17:24,400
[narrator] By 2019,

308
00:17:24,480 --> 00:17:28,320
American credit-card debt
stands at $930 billion.

309
00:17:30,000 --> 00:17:32,680
And it's not just America
that's drowning in debt.

310
00:17:33,680 --> 00:17:34,720
In China,

311
00:17:34,800 --> 00:17:39,480
the credit-card balance
reaches $1.23 trillion in 2020.

312
00:17:40,520 --> 00:17:44,720
{\an8}And while UK total credit-card debt
is less than $100 billion,

313
00:17:45,360 --> 00:17:47,960
{\an8}that's still enough
for the British taxpayer

314
00:17:48,040 --> 00:17:50,880
{\an8}to fund more than 1,000 royal families.

315
00:17:54,880 --> 00:17:55,760
The truth is

316
00:17:55,840 --> 00:17:58,640
we're now hopelessly addicted
to our cards.

317
00:17:58,720 --> 00:17:59,880
[whooping]

318
00:18:01,080 --> 00:18:01,960
Literally.

319
00:18:03,320 --> 00:18:06,720
A recent MIT study used MRI readouts

320
00:18:06,800 --> 00:18:11,040
to show how credit-card spending
stimulates the brain's reward system,

321
00:18:11,560 --> 00:18:13,160
a release of dopamine,

322
00:18:13,240 --> 00:18:14,880
even more so than cash.

323
00:18:16,600 --> 00:18:18,880
And that creates an urge
for further spending.

324
00:18:18,960 --> 00:18:20,480
Very stylish.

325
00:18:21,480 --> 00:18:23,440
-[narrator] And yet…
-["The Blue Danube" playing]

326
00:18:23,520 --> 00:18:25,920
…never has there been a time
in human history

327
00:18:26,000 --> 00:18:28,800
when we have so many cool, exciting,

328
00:18:29,400 --> 00:18:31,360
fun things to spend our money on.

329
00:18:32,080 --> 00:18:33,120
Gadgets,

330
00:18:33,200 --> 00:18:34,080
fashion,

331
00:18:35,120 --> 00:18:35,960
sports,

332
00:18:37,120 --> 00:18:39,320
luxurious foreign holidays.

333
00:18:42,120 --> 00:18:45,000
[woman] I'm wearing
the most expensive Bluetooth headset

334
00:18:45,080 --> 00:18:45,960
in the world.

335
00:18:46,040 --> 00:18:51,360
So it is made out of real pearls
and diamonds and white gold.

336
00:18:52,320 --> 00:18:55,400
Retail price would be 115,000 euros.

337
00:18:56,640 --> 00:18:59,520
[narrator] Credit cards have made
spending money easy.

338
00:18:59,600 --> 00:19:02,360
Just a quick wave of a contactless card,

339
00:19:02,440 --> 00:19:03,720
a tap on our phone,

340
00:19:04,320 --> 00:19:06,240
or a swipe from your wristwatch.

341
00:19:07,480 --> 00:19:09,720
And it's only going to get easier.

342
00:19:09,800 --> 00:19:10,680
[beeping]

343
00:19:13,400 --> 00:19:16,760
Companies are already introducing
new ways of paying

344
00:19:16,840 --> 00:19:20,040
using super-secure
biometric authorization,

345
00:19:20,120 --> 00:19:21,520
such as fingerprints,

346
00:19:22,040 --> 00:19:23,360
facial recognition,

347
00:19:23,880 --> 00:19:25,240
and iris scans.

348
00:19:27,240 --> 00:19:29,760
We'll soon be buying all sorts of stuff

349
00:19:29,840 --> 00:19:31,240
in the blink of an eye.

350
00:19:34,440 --> 00:19:36,640
So, where do we go from here?

351
00:19:37,400 --> 00:19:42,400
How will our brains rewire and adapt
to this new form of payment and reward?

352
00:19:42,920 --> 00:19:46,000
Will we find ourselves
even further in debt?

353
00:19:46,520 --> 00:19:49,720
Can we ever trust ourselves
to spend wisely

354
00:19:49,800 --> 00:19:51,080
when the credit card

355
00:19:51,720 --> 00:19:52,680
is us?

356
00:19:56,320 --> 00:19:58,560
[dramatic electronic music plays]