My Cynical Review of Maxed Out: A Film About Credit Cards

The photo of the enormous McMansion in my previous post reminded me that I needed to continue watching Maxed Out, a documentary about the credit card business. On Google Video [90 minutes long], you may watch it for free (although bad quality). In the first scene, a real estate agent sells properties with ridiculous features like elevators, two dishwashers, and wine caves.

Twisted Thoughts

The film’s goal was to “raise awareness of the impact of credit and lending crises on society.” This is a noble goal, in my opinion. However, as someone well-versed in credit card firms and their methods, my initial reaction to this film was “duh.” Please be aware that there will be a lot of snark and cynicism ahead.

Credit card corporations prey on the illiterate, the destitute, the wealthy, and anyone in between. You will be charged exorbitant fees and interest rates if you pay late. They’ll even extend credit to those who have recently filed for bankruptcy since they know (1) they won’t be able to file for bankruptcy at BankruptcyHQ again for several years and (2) they’ve previously demonstrated an incapacity to manage their finances. Even if you’re dead or imaginary, you’ll still get card applications in the mail.

However, I heard phrases like “Yeah, I signed it without reading…” or “I figured if they offered me money, it meant I could handle it” or “I never talked to my kids about credit cards before sending them off to college” or “I know, I know, I should have read the fine print” far too frequently in the film. Please don’t make it so simple for them…

Credit card firms target students in college. We’ve already observed that approximately 70% of Stanford students had parents who earn more than $100,000 per year. Students, of course, are a target! Mom and Dad will compensate you. Abercrombie and Fitch generate so much money for the same reason. Why can’t Visa try to sell a credit card on school if the US government has recruiters on campus to persuade an 18-year-old to join the army? They appear to have the right to make their own decisions as adults.

Debt collectors aren’t nice individuals, and they’ll use any means necessary to get you to pay. I had imagined fuzzy bunnies dropping fragrant pink notes asking me to pay back money that I had already been late for six months…

Underlying Problems are Ignored

I believe that credit card firms may be insensitive. However, Visa and Mastercard are just two of the 100,000 companies that would gladly accept my money regardless of my financial situation. Credit card firms are in the business of selling money. Apple is a company that sells iPods. Walgreens is a pharmacy that sells medications. Is Apple to blame if they persuade a broke college student to buy an iPod? Is it unethical for a drugstore to sell a Medicare recipient a $70 prescription (of which $20 is profit)? These two questions show the true concerns that need to be addressed:

First and foremost, why are individuals buying things they don’t require? Why do people believe they are entitled to things they have not worked hard enough to pay? Automobiles, iPods, jewelry, and clothing are just a few examples. There’s something fundamentally wrong with this situation. It’s simple to point the finger at others, but people, take some responsibility! Dave Ramsey may be correct in his assertion that some people should only use cash.

Second, why do individuals use credit cards for goods they require? The rest of the population relies on credit cards to get by. Groceries, medicine, and gasoline are all necessities. Again, this is a more significant issue than restricting late fees to $40.

Some Fascinating Information

– MBNA paid $13 million to the institution in the film (forgot the name) for the right to use the official school emblem on their credit card. Hmm…

– Many individuals despise payday lenders. Did you know that Cash Advance, a large payday loan chain, has a significant funding partnership with Wells Fargo? CashAmerica, a large pawnshop chain, is likewise backed by Wells Fargo. Many other big banks have similar loaning arrangements with such “predatory” companies. So hold in some of your rages for them as well.

– The US government owes a large amount of money. We spend more on loan interest payments (our version of credit card “minimum payments”) than we do on education, homeland security, and healthcare combined. The average citizen’s portion of the national debt has risen to almost $30,000 per person.

Why I Still Enjoy This Movie

Although I disagree with the one-sided depiction, I am hopeful that Maxed Out will achieve its purpose of raising awareness. Credit cards aren’t your buddies; they’re only there to help you make money. If the truth is enough to enrage people, they should shred all of their credit cards. Alternatively, they could exert enough pressure on their elected officials to effect change. Alternatively, if they believe they are capable, they could turn the tables by utilizing loss leaders such as credit card rewards and 0% interest loans to recoup some money. It’s not about you; it’s about the business. I’m also here to make money.

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