Maxed Out - The Credit Crisis in AmericaI recently had the chance to watch Maxed Out the movie. It is a documentary about the deep dark journey into credit card debt faced by so many people in America. It delves deep into the frightening number of things that happen behind the scenes between the credit card companies, the government, and American attitude of entitlement. The brief synopsis from the movie’s website describes it as:

Maxed Out takes viewers on a journey deep inside the American style of debt, where things seem fine as long as the minimum monthly payment arrives on time. With coverage that spans from small American towns all the way to the White House, the film shows how the modern financial industry really works, explains the true definition of “preferred customer” and tells us why the poor are getting poorer while the rich keep getting richer. Hilarious, shocking and incisive, Maxed Out paints a picture of a national nightmare which is all too real for most of us.”

Catch this snippet from the movie

It doesn’t even begin to scratch the surface of the stories shared in the movie.

Now, I knew there were issues in the whole credit card, debt, bankruptcy, and “dig the whole deeper” cycle. I know the name of the game with lending institutions is to keep you paying the minimum payment forever until you die and then snatch whatever remains from your estate if possible. It is the way they choose to do business and if you could ever read all the fine print you might say you were duly informed. However, I never had any idea the amount of collusion between government, credit card executives, and those “high risk” lending and check cashing outfits. I was utterly appalled by the snippets of comments from within the Congressional Halls and those that spewed forth from George W’s mouth on camera (although by now I shouldn’t really be surprised, should I?). Even if you dismiss some of it as documentary artistic license ala Michael Moore, there is still enough drama and truth here to make a savvy financial person bang one’s head.

I fully believe in personal financial responsibility. I don’t think people should just be randomly forgiven their debts because they goofed up or stuck their head in the sand. Yet, there is something seriously wrong with a mindset that offers credit to unsuspecting teens and families that clearly have no business taking on more debt. But, then again, those are the very people that are most profitable to the credit card companies; especially those who have already declared bankruptcy because they cannot turn around and declare it again. According to the person from Harvard that was on the film, when she asked credit card companies about this practice they responded they liked these customers because “they already have an appetite for credit”. Ah, meaning, spend what you don’t have and get in WAY over your head.

Of course we as a culture have a taste for excess. I loved this quote from the movie:

“Nobody would watch Lifestyles of the Poor and the Unknown.”
-Robin Leach

Exactly! Perhaps one of the stories that amused me most was some Christian Right guy preaching from the pulpit that the reason YOU don’t have money is because you don’t tithe first. You must first give your money to God. OK, so much for pay yourself first as a financial fitness I guess.

The most touching moments were the stories about two young college students who had signed up for a credit card because the companies were on campus offering freebies to people who signed up. These kids had no income and no experience with how to use credit wisely; they just wanted a free t-shirt. I mean as a new college student, who wouldn’t? In the end both committed suicide because they got in so deep and were so ashamed by the situation that they couldn’t face their families or themselves. Now THAT is painful to watch.

Considering that you read this blog, I may be preaching to the choir, but it bears repeating to read the fine print and avoid late fees at all costs. Just know that there is more to the debt crisis than meets the eye.

If you get the chance, watch the movie — it is fascinating to watch.

Paula Gregorowicz, owner of The Paula G. Company, works with women who are ready to create their lives and businesses the way the want rather than how they were told they “should”. Ready to learn how to achieve success on your own terms? Download the free 12 part eCourse “How to Be Comfortable in Your Own Skin” at her website http://www.thepaulagcompany.com and Coaching4Lesbians blog.

Photo Credit: Ross_Angus