A HUNDRED YEARS AGO, THE NOTION OF DEBT was fairly progressive: It was a way to elevate your quality of life today and pay down the cost in the future. Then came revolving debt—handy if you have a good financial head on your shoulders, but difficult to navigate and potentially disastrous for your credit. Through the credit-card industry and the broader lending industry, banks kept customers on the brink of peak financial indebtedness with deliberately complex contracts and concepts like minimum payment, which is essentially a trap.

Four...