Now, before you go clicking away because you realize you’ve stumbled onto a documentary about credit-card debt, let me just say this: The practices of credit-card companies are not only fascinating, but downright criminal. This was one of the most enlightening documentaries I’ve seen in years. Seriously: It is absolutely insane what they get away with, and if you’re like me, you probably had a checkered past dating back to a credit card (or eight) in college and a lot of youthful indiscretions (read: alcohol, ill-advised road trips, unnecessary electronics, overdue rent, and even arguable college necessities like food) that has given you some firsthand experience with debt-collection practices, the unethical nature of credit-card companies, and those goddamn credit scores that manage to haunt you for years.
Take, for instance, my own personal anecdote, which is indicative of the douchebag practices of credit-card companies: A few years back, I returned to my old house, five years following the death of my father. During the man’s lifetime, he managed a feat accomplished by few: He’d filed bankruptcy twice within a relatively short period (six years or so), most recently within months of his death. I mean, this man had nothing — the best that could be said about his financial condition was that he’d graduated from newspaper delivery boy to overnight convenience store clerk, not exactly a lucrative career. So, naturally, after he died, the “bank” foreclosed on the ghetto establishment I’d been raised in and, in years subsequent, the “bank” couldn’t even manage to unload it in foreclosure sales. So, it sat abandoned for the entire five-year span.
But when I went back to see what had become of the old stomping grounds (it appeared that several homeless people had taken up sporadic residence, evidenced by the cigarette butts and other contraband littering the floor), I checked the mailbox. And wouldn’t you know, it was chock-full of pre-approved credit-card offers in my father’s name. And these offers didn’t date back to the time of his death (the contents of the mailbox had probably been used several times over to light campfires in the living room): The postmarks were only a few days or weeks old. And yet, the man had been dead for five years. And he was broke, to boot.
And, as Maxed Out: Hard Times, Easy Credit and the Era of Predatory Lenders so deftly demonstrates, that’s exactly how credit-card companies make most of their money: No, not by preying on the dead, but by preying on the hopelessly poor, who have little chance of making on-time payments. They really don’t give a rat’s ass how much income you make (and if you’ve ever seen your FICO score, you’ll notice that income, assets, etc. is nowhere to be found), the thing they look for most is someone likely to rack up late fees and exorbitant balances, which they can charge 30 percent interest rates on. That’s where the money is.
What’s more, credit-card companies are not terribly bothered with bankruptcies (even if MBNA — President Bush’s number-one campaign contributor — wrote the latest bankruptcy legislation), because after 180 days have passed and the credit-card company charges off your debt as a loss, they’ve added twice as much in late fees and penalties to the actual principal. So, they may not get the $100 you owe them, but they can write off a $300 loss. And what do they care, anyway: By the time you declare bankruptcy, you’ve already been making minimum payments (90 percent of which is applied to interest) for years. So they’ve already made their money on you. All of which is precisely why they target irresponsible college students who have no income — because many of them will spend the rest of their lives making minimum payments, after which the credit-card company has made four or five times their initial investment.
This is the type of information that Maxed Out — which was written and directed by James D. Scurlock — digs up, weaving together interviews with both experts and assholes, heartbreaking personal narratives, hypocritical political sound bites, and even a stand-up routine from Louis C.K. (When you’re rich, the bank pays you for being rich; but when you’re poor, the bank charges you for insufficient funds: “So they charged me. They charged me $15. That’s how much it cost to only have $20 in your account.”)
Did you know, for instance, that the average family has over $9,000 in credit-card balances and spends over $1,300 a year in interest payments? Crazy, right? Or that the average late fee is now $43, on top of the $43 penalty you get for going over your credit limit: That’s $86 and you haven’t even made a dent in the principal. Not to mention the fact that, once you’re late, your interest rate increases — on average, up to 28 percent. You see, they want you to be late. That’s how they make obscene amounts of green. It’s also why Providian Financial settled a lawsuit in 2004 for $400 million, after it came to light that they were holding people’s checks (or shredding them) to ensure that their customers would rack up late fees and penalties. And the most depressing addendum to that lawsuit was the fact that George Bush appointed a “czar” to clean up corporate America two years later. And who did he choose: A director of Providian Financial, of course. Un-fucking-believable.
In addition to information like this, the personal accounts of individuals are downright morbid: Maxed Out uncovers the relatives of three people, all of whom had a family member commit suicide because of the amount of credit-card debt they were in. Two of these people were mothers who lost college-aged children; they even argued in Congress against the recent bankruptcy legislation, though they hardly had a chance up against scores of corporate CEOs and lobbyists pushing their own agendas (with campaign contributions to back it up). In another instance, an inaccurate credit report stated that one woman was dead, which created all sorts of problems when she tried to buy a car, never mind that Homeland Security (which uses credit reports to identify terrorists) ultimately interrogated this woman for eight hours on suspicion of faking her death. Can you believe that shit?
But for me, anyway, the most fascinating aspect of Maxed Out was its interviews with the owners and employees of a collection agency: Total scumbags. These people are the scourge of the Earth. “You’re like this pirate on a pirate ship, you know. And you got this person, and you’re walking them down a plank. And you walk them as far as you can on that plank without pushing them off,” one collection agent says. And he has absolutely no misgivings about the fact that they occasionally screw up and push those people off the plank and, literally, to their deaths.
Whatever. I could go on for pages about both Maxed Out and my own personal dealings (several years ago, in fact, a collection agent called my girlfriend’s father who lived in a different state, to notify him that I had a serious criminal lawsuit pending against me and that I needed to return the phone call immediately, only to learn that I had an unpaid phone bill from the ’90s), but I suppose that would dampen your motivation to see the documentary. And you should see Maxed Out, because it will open up this entirely different world to you, whether you’ve dealt with these issues or not. It’s an eyebrow-raising, acerbic, amusing — sometimes harrowing — exploration the credit-card industry that not only enlightens, it alarms. And believe it or not, this engrossing documentary also manages to entertain. I know I sound unusually effusive, but Maxed Outtruly ought to be required viewing for all college freshman, who should know that, for many of them, “death will be the only form of discharge that they will ever see.”
Dustin Rowles is the publisher of Pajiba. He lives with his wife in Ithaca, New York. You may email him, or leave a comment below.
Maxed Out / Dustin Rowles
Film | March 8, 2007 | Comments ()