Maxed Out is a new film that examines the credit industry — its profitability and its effect on consumers. It’s a sort of Super Size Me, but with credit cards instead of hamburgers. Here’s the trailer:

The film discusses the role of banks, of government, and of consumers in creating an industry that is, in the words of Harvard law professor Elizabeth Warren, “obscenely profitable”. Here’s how the press kit describes the movie:

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…

What I liked
Maxed Out peeks into all corners of the credit industry. It shows us borrowers and lenders, payday lenders and pawnbrokers, commentators and collection agents.

We meet Chris and Bob, for example, the owners of People First, a Minneapolis debt collection agency. They claim their company takes a kinder, gentler approach, but then gleefully compare their tactics to those used by pirates. We also meet Lynn Stavert, a California woman whose husband recently died, leaving her unable to make the $4,000/month mortgage payment. (She used credit card cash advances for a while before giving up.) The various stories illustrate how our lifestyles have become thickly entangled with easy credit.

The film notes that lenders make money from poor credit risks. Banks don’t give you credit because they think you can repay it — they give you credit because they think you can’t. The film-makers follow an investigative reporter as he visits the Browns, a poor family in Aberdeen, Mississippi. John, the eldest son in the family, is 44 and severely retarded. The Browns had a low-interest government subsidized mortgage. A saleswoman from CitiFinancial convinced John to replace that loan with a longer, higher-interest product the family cannot afford. She led John to believe that the loan would benefit the family. She then helped him to sign his name to the contract in big block letters. This makes my blood boil.

Maxed Out also draws parallels between consumer debt and the debt of the United States as a nation. “Why should we live within our means when the government won’t?” the film seems to ask.

What I didn’t like
Though I liked Maxed Out, it did have some weaknesses.

  • There’s a lack of clear narration.
  • It would have been nice to have a brief historical overview of credit in the U.S.
  • At times, the film feels unnecessarily political.

The biggest flaw, though, is a failure to address the subject of personal responsibility. Debtors are portrayed as victims of the banking industry. While I acknowledge that the credit industry preys on the poor, there are millions of middle-class Americans in debt because of bad decisions, because of a consumeristic lifestyle. I should know — I’m one of them.

At one point, the film-makers interview Trisha and Jane, two grieving mothers from middle America. Both lost college-age children to suicide. They believe the suicides were spurred by credit card debt. The implication is that the credit card companies killed these kids. This would have been a great spot to talk about personal responsibility, but it’s an opportunity lost.

Maxed Out should be required viewing for young adults. People often complain about the lack of financial education in our schools — this film would be enlightening for many high school and college students. After watching it twice, I’m more convinced than ever to avoid credit. When I’ve paid off my debt a year from now, I will carry my mortgage. That’s it. I’ll even try to purchase my next vehicle with cash. (This may not be feasible, but I’ll give it a shot.)

Maxed Out enters limited release this Friday, March 9th. I’ve been unable to find any information on when (or if) it will enter wide release. Laura Rowley at Yahoo! Finance has posted her review of the film. You can follow mainstream reviews at Rotten Tomatoes.

For another look at the credit industry, check out “The Secret History of the Credit Card”, available free at Google Video. (I covered “Secret History” here.)

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