It took me several years to get to James D. Scurlock’s documentary, “Maxed Out,” but the film about credit card debt — and societal debt as well — seems up to the minute as our country moves toward the “fiscal cliff” (again).
The documentary is as horrifying as last year’s Oscar winner “Inside Job” — the film about the Wall Street collapse of 2008 — but it actually has broader implications because it’s about the way a whole society has accumulated catastrophic debt.
Scurlock zeroes in on the connection between the deficit racked up by our government and the personal debt load of American citizens.
When the film was made six years ago, the average American carried about $9,000 in credit card debt and was being hammered with interest rates of up to 21 percent. Now, most of the major credit card issuers have the power to jack up interest rates to the 30 percent level.
Just as home owners have refinanced their dwellings — and raided their 401(k)s — to pay down credit card debt, the government for decades has been spending the money it was supposed to be setting aside for Social Security.
The interest on credit card debt that is walloping many middle class Americans is not that dissimilar from our government having to pay out more in interest on its loans each year than it spends for education and Homeland Security.
“Maxed Out” shows us how banks zero in on what would appear to be the worst customers because they make the most money from the interest and fees paid by those who get in way over their heads and can only afford to pay the monthly minimum. And speaking of fees, we hear stories of one of the more corrupt credit card issuers intentionally holding customers’ checks until after the due date so that a late fee can be levied.
Way back in the 1970s before banks went crazy handing out credit — and interest rates were capped at a maximum of 20 percent — you couldn’t get a credit card if you didn’t have a decent job and a record of paying other bills.
My first card was from JC Penney and I didn’t get it until I was two or three years into my first post-college job. “Maxed Out” shows how the banks set up shop on campuses now to sign up entering college students who have no significant income.
Yes, there is personal responsibility involved with getting and using credit, but it wasn’t available to me at 18 so I didn’t face that temptation.
“Maxed Out” is packed with fascinating and important information about the credit rating agencies, the techniques used by bill collectors to embarrass clients and the way that the lobbying power of banks — and their huge contributions to presidential election campaigns — has made it almost impossible to regulate credit cards.
On one level, the movie is a downer that offers little hope for changes in America’s attitude toward debt, but Scurlock certainly makes an individual viewer stop and think about the craziness of spending money you don’t have. It should be mandatory viewing for graduating high school kids.