Personal Finance Bloggers Say "Maxed Out" Has Non Sufficient Funds

We’re not the only ones irked by the Maxed Out documentary.

All Financial Matters also disliked its lack of attention to personal responsibility and found it overly politicized with, “snippets of nasty, mean Republican’s siding with credit card companies and nice, responsible Democrats standing up for Americans.”

Get Rich Slowly said, “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.”

Both, however, found it a good expose of how you can be taken advantage by predatory lending practices if you’re not extremely careful when you borrow money. Certain kinds of debt, like for appreciating assets, are okay, but most people would be better off not buying things they can’t afford to pay with cash on the barrelhead. — BEN POPKEN

PREVIOUSLY: Maxed Out: Take It For What It’s Worth

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  1. spanky says:

    I said this before, but I really don’t think it was supposed to be an instructional film showing people how to manage their finances. People who go to see a documentary about the credit card industry probably already know that you shouldn’t accumulate a bunch of consumer debt.

    I would have been very bored and disappointed if it’d spent time driving home the elementary point that you shouldn’t spend more than you can afford.

    I was much more interested in seeing how the industry works.

  2. Chicago7 says:

    Hey, if they aren’t sleazy, why do they need 10 pages of small print?

    :D

  3. AT203 says:

    I haven’t seen the documentary yet, but I do not think this is valid criticism. The purpose of the documentary was to highlight the greed and dishonesty of the predatory lending industry. Unless the documentary follows the lives of people making obviously irresponsible choices and blames the problem on the industry, then the documentary is fair. It isn’t right to criticize it for staying on topic.

  4. XopherMV says:

    There is a reason that companies spend BILLIONS of dollars each year on both marketing AND advertising. There is a reason that companies have spent TRILLIONS over decade after decade for longer than the oldest of us can remember. There is a reason that advertising is now pervasive throughout our entire society such that it now defines our culture. That reason is: marketing and advertising works!

    All this talk about “personal responsibility” is fine. And yes, I agree with it, to a point. The problem is that it comes in an environment loaded with those marketing and advertising messages designed to part you from your money.

    These messages are not trivial. They are pervasive. We see them every day in every location that companies can put them. We are bombarded with these messages on a daily basis since birth. In short, we have been psychologically manipulated from birth to buy these products by spending money, regardless of whether we have money or not.

    Credit card companies are successful in predatory lending practices because all companies are successful in their advertising practices.

    So, I don’t necessarily buy it when people place the sole blame of overspending at the feet of consumers for doing exactly what companies want and actively manipulate them to do.

  5. XopherMV,

    I don’t understand your point. Is your point that personal responsibility just can’t hold up to marketing?

  6. matt1978 says:

    I guess Xopher smokes like a chimney, drinks like a fish, and eats everything in sight also. But hey, that’s what the ads tell us to do, right? Maybe he should borrow Roddy Piper’s sunglasses.

  7. spanky says:

    I saw the movie months ago, so I can’t recall specifics of what was covered.

    However, Elizabeth Warren (the law professor featured throughout, who is also, I believe, a Republican) has addressed the issue of personal responsibility and overconsumption repeatedly.

    Here’s a PDF of some testimony she gave at a Senate Finance Committee hearing, in which she addresses trends in fixed vs. luxury expenses among the middle class. Short version: Adjusted, the middle class today spends less on food, clothing, cars, and appliances than they did in the 70s. What we’re spending more on are fixed expenses such as health care and housing and daycare. In fact, other PDF studies have shown that some of the strongest correlations to household debt are households that have had recent medical expenses. This isn’t just the uninsured, either, but families who do or did have health insurance.

    None of that is to say that people don’t go into debt by overspending. They do. But it’s not the only factor, and it doesn’t seem to be the most significant factor, even.

    And again, maybe it would be an important factor to play up if this were an educational film they were going to be showing in high schools, or even if it were a 20/20 episode or something. But it’s not. It’s a documentary about the credit card industry, wisely targeted toward people who are going to go to a movie theater to see (or rent to watch at home) a movie about the credit card industry. It would be patronizing and ultimately pointless if the movie spent any significant effort driving home the point that you shouldn’t take out high-interest loans to buy luxury goods.

  8. disposable says:

    Thank you, XopherMV! Corporations incessantly use fear, (low)self-esteem, sex, violence and many other tactics to cause dissatisfaction with one’s material possessions. And that is the point.

    Yes, credit card companies are bad. Yes, fiscal responsibility is important. But there exists an insidious layer of advertising that permeates our lives, and those affected often end up in debt.

    If you believe you are immune, you are wrong. It is a constant battle to detoxify advertising’s effects — to resist the “perfect, shiny object” — and only through awareness can we even begin.

    As a starting point to educate yourself, please read Lasn’s Culture Jam.

  9. bnissan97 says:

    In reference to republicans (not capitalized on purpose) “All Financial Matters also disliked its lack of attention to personal responsibility and found it overly politicized with, “snippets of nasty, mean Republican’s siding with credit card companies and nice, responsible Democrats standing up for Americans.””; I can’t help but get on my soapbox.

    Republicans, I feel primarily have funds to pay off their credit cards every due date. Republicans aren’t generally in need so of course they don’t fall prey to predatory lenders.

    And don’t start with the “I earned it” that republicans say. Yes republicans may have completed college as I a Democrat have, however for the republican, daddy paid the credit card bills, daddy bought not just basic transportation but extravagant transportation for the kids etc. while the kids were in college.

    Yes the republican earned their job and went through the interview. However it was a pseudo interview as daddy’s golf partner is the CEO at the company that the republican child got their job at and the job was “arranged”

    This may seem a bit hypocritical of me as my parents paid my car payment and mortgage while I was in college. This was however after years of me struggling and struggling. I kinda have “both worlds” syndrome. I did not have excess and have been shielded from predatory lenders. I have however worked in my struggling years with people that did not have parents to assist; hence they incurred predatory lenders and debt.

    Oh yes, don’t buy what you can’t afford. republicans can afford expensive things because they don’t want to pay wages for others to have even simply nice things.

    One simply cannot live on low wages and the republicans don’t like raising the wages. So the righteous republicans do not want to pay the common folk hence skrewing them, then turn around and skrew them again by predatory lending. Not to mention they are the moral majority so of course Jesus wants this. It makes me sick. Our country going the way of the haves and have-nots sickens me.

    YES I FEEL rEPUBLICANS ARE TO BLAME FOR MANY PEOPLE BEING “MAXED OUT”!!

    Hence the majority of U.S. is to be blamed, as it is U.S. citizens that voted to allow Bush a second term.

  10. Rusted says:

    “Republicans, I feel primarily have funds to pay off their credit cards every due date. Republicans aren’t generally in need so of course they don’t fall prey to predatory lenders.”

    Oh please. There are poor Republicans and rich Democrats as well as vice-versa and in-between and independents like me.

    Personal Responsibility. Look in the (censored) mirror…. Society is not liable for the idiocy of an individual.

    I did the credit card thing, and the car loan, and had a mortgage and paid all of that off. It’s a very simple concept and idea…..pay off debt and spend less then the paycheck. Not easy and incredible hard work but it’s awfully rewarding to be able to not have to live paycheck to paycheck.

  11. Snakeophelia says:

    “Oh yes, don’t buy what you can’t afford. republicans can afford expensive things because they don’t want to pay wages for others to have even simply nice things.”

    You’re kidding, right? You do realize life is not the game of Monopoly, with the little white-haired behatted banker controlling all the dough? Please. I come from the Deep South and my family is as Republican and as blue-collar as they come. My college education was paid for by scholarships, since I worked hard in school – thanks to those same Republican values.

    Have you not noticed all the intelligentsia and celebrities these days with bucks aplenty and leftwing politics? Have you never heard the term, ‘limousine liberal?” Have you never examined the bumper stickers in the parking lot of an expensive grocery store like Whole Foods?

    Anyway. I’ve yet to see Maxed Out, so I can’t comment on whether they gloss over the issue of personal responsibility. However, if the point of the documentary is to say that credit card companies are crooked, then that’s a separate issue from personal responsibility. Debt can be managed wisely, but there’s no point in it being an uphill battle all the time if companies are not treating their customers fairly.

  12. olegna says:

    I’m all for personal responsibility, but the same libertarian argument (that CC companies should dole out plastic to college freshman who’ve never had any formal education on personal finance because, gosh darn it, we all SHOULD have a sense of responsibility) could be made to legalize hardcore pornography on television and make it an issue of personal responsibility to keep your kids from watching it. Sometimes the libertarian argument runs into a wall where, finally, there’s some justification for regulations.

    The simple fact of the matter is: Americans are idiots on personal financial matters. (I recall reading that the average household owes like $7K in unsecured debt, which by anyone’s definition is a symptom of stupidity.)

    We can have a laissez faire attitude to unsecured credit if you want, but the product of that is a huge amount of consumer debt, which is bad for America.

    Also, who says Dems are pro-consumer? If that’s what the documentary says, then perhaps you’re right “Maxed Out” is bullshit.

    I don’t know where people stand on the bankruptcy reform bill (or the preposterous notion that companies can become “independent entities” and be treated like culpable humans, thus protecting CEOs and board members from legal actions — i.e. when a company screws its creditors then filed for bankruptcy and the company directors walk away scott-free) but the Democrats are just as culpable of accepting legalize bribes from the financial services industry for anti-consumer legislation.

    What bothers me in particular is that companies have greater bankruptcy protection than people. I was once screwed out of $9,000 because a company went under but because it was an “Inc.” I couldn’t go after the owners for the money. Three months later, the owners “reconstituted” their business by simply changing the CEO from the husband to the wife, screwing me and bunch of other freelancers for money owed. Talk about criminal (but legalized through our corrupt political system that allows special interests to buy legislation) irresponsibility.

    If companies can be shielded from such debt collection, then why should human beings not be allowed the same protections?

  13. gatherdust says:

    I’m not particularly interested in passing an audition in order to comment on a Consumerist posting. It’s not something that rises to the level of an accomplishment I’m seeking to boast about and the God knows we don’t need more snark in the world.

    That being said, I’m disappointed in Popken using the tiresome complaint about personal responsibility in an expose about a multi-billion dollar industry that has as one of its central objectives the undermining of personal responsibility.

    Personal responsibility is one of those things near and dear to folks who are convinced of the amazing powers of commonsense. You know the drill. If only people relied on simple commonsense then fettered minds would clear and the weak would be energized to toss off the yoke of their irresponsibility. Unfortunately, commonsense is not the everyday mental cleanser some make of it. Because it can cover all bases (“out of sight, out of mind” and “distance makes the heart grow fonder”) it covers none.

    The credit card industry spends billions in marketing and promotion every year to convince people that regular indebtedness is normal, fiscally sound, and the American way of life. And they deploy the entire arsenal of techniques and practices that their specialists in consumer behavior can supply. In the face of this barrage which is itself only part of the constant onslaught of advertising and mass persuasion, you suggest that a little ‘just say no’ would cure individuals and society of the scourge of credit card manipulation.

  14. SpecialEd says:

    It reminds me of the commercial I hear on the radio for consolidating debt when the announcer says, “…and credit card debt is NOT your fault.”

    I know the point of the documentary is that banks/cc companies are increasingly predatory, but some mention of personal responsibility should have been in there. People need to be educated and told that debt=slavery. I agree that the film is very deficient due to this oversight.

  15. SpecialEd says:

    @bnissan97:

    “This may seem a bit hypocritical of me as my parents paid my car payment and mortgage while I was in college.”

    I didn’t have a car in college and my mother had NO money to give me. I worked my way through with no outside help and I consider myself a Republican. I don’t know where you get your ideas, but painting people with such a broad, inflexible brush is generally not a good idea. I wish my Republican single mother had enough money to buy me a car and pay my rent. Guess I should have been a greedy Democrat.

  16. Chicago7 says:

    Aren’t most modern Republicans rednecks from the South with three teeth and names like Cletus and Bobby Jo?

    I mean, they elected Bush. How smart can they be?

    :D

  17. anatak says:

    I have not seen Maxed out, tho I am absolutely aching to.

    That being said I think spanky nailed it. I’ve read the director’s commentary on the website. It sounds like he did exactly what he set out to – expose the industry for the slime that they are, and show how absolutely out of control they are. His intent, as I understood it, was to do something in the same vein as Morgan Spurlock’s Super Size Me. It is intended to be a “complete portrait of this country in 85 minutes”. Not ‘The Complete Guide of How To Handle Money and Take Responsibility for Your Actions’.

    If the PF bloggers are irked (dear God, NO!), then it is because they went in with the wrong expectations. You may not have liked Bowling for Columbine because it wasn’t about bowling – doesn’t make it a bad film or incorrect or a ‘gutter ball’ (ha ho!). Just not what you expected/wanted.

    If you are looking for complete education on this matter coupled with the personal responsibility you oh-so crave, then you need look no further than Dave Ramsey. And he does have a high school curriculum on the subject, that is being taught. And yes, it would be a tad hard to squeeze all of that into 85 minutes.

  18. olegna says:

    I suppose some of the libertarians here would think I’m a commie to say that I think 30% APR should be illegal.

    I don’t owe any unsecured debt, but there heave been times in my life where if I had been injured or in need of hospital treatment, I would have been sent into cc debt. (I suppose that makes me irresponsible for not having pulled myself up higher by my bootstraps.)

    Am I an anti-capitalist to ask that credit card companies consider payments due based on the stamp by the US Postal Service indicating the date the payment was mailed by the cardholders?

    Am I a pinko to ask that human beings be given similar bankruptcy protections that the law in the US gives “corporate entities”? (Or at least expect the same “responsibility” from corporate entities?)

    My point is that this is supposed to be a consumer-oriented website. If the editor of this blog wants to lick the boots of the US financial services industry (which is filled with many bullshit anti-consumer tricks) and spout Ted Nugent-style libertarian BS about how it’s all the consumer’s fault, then why the hell is (s)he editing a consumer-rights website?

  19. tcp100 says:

    My whole argument is the folks that think credit cards are evil, can’t be used responsibly by ANYBODY, and should be just done away with all around. That’s the attitude that Maxed Out seems to reinforce, and it’s just not true.

    I’ve had credit cards since I was in college (yes, I applied at one of those tables) – that’s ten years now – and I’ve never, ever had a problem. My girlfriend has also never, ever had a problem with them, and we use them all the time – to plan expenses when we know we have money coming in (but next week, not “today”), and I’ve been offsetting my gas bills by the gas cards I get in rewards points. Also, there’s really no safer way to make transactions online.

    A lot of people don’t seem to acknowledge this, but there are no two ways about it. If you are in trouble with a credit card – YOU DID SOMETHING WRONG. If that “doing something wrong” means you didn’t understand the concept of an interest rate and late fees and a credit limit, well, tough. It’s still your fault; you either charged too much or didn’t pay enough.

    Credit card companies DO take advantage of people – people that are not educated, or worse. An educated, intelligent person should have no problem using a credit card with no ill effects. If they do, they made a mistake. Whether the aftermath is “unfair” is really irrelevant. Yes, a default APR of 30% is ridiculous, but it’s a concept that’s well known and warned about. It may be in fine print, but the concept of “..if you fail to pay on time or exceed your credit limit at any time during your statement period, we may raise your APR to a default rate, currently 24.99%..” is not hard to understand at all.. (reading off an application that was sent to me here)

    Answer: even if you have a 0% card, NEVER, EVER carry a balance that you couldn’t pay off if the APR was jacked up to 30%. That’s called the “shit happens” rule.

    If you need more money than you can pay off completely in a month or two, go to a bank and get a loan. If you can’t get a loan at a bank, you can’t afford to borrow that money – at a bank, or on a credit card, so don’t do it.

  20. tcp100 says:

    @olegna: “My point is that this is supposed to be a consumer-oriented website. If the editor of this blog wants to lick the boots of the US financial services industry (which is filled with many bullshit anti-consumer tricks) and spout Ted Nugent-style libertarian BS about how it’s all the consumer’s fault, then why the hell is (s)he editing a consumer-rights website?”

    Heh, because it is NOT ALWAYS THE CORPORATION’S FAULT! Just because corporations ARE tricky and do screw over consumers, doesn’t mean that consumers can cover their ears and eyes and and go LA LA LA and pretend there’s no responsibility on their part for what they do!

    What you’re talking about, concerning mailing dates, bankruptcy laws, and healthcare costs are valid. (You can empower yourself a bit by paying your credit card bills online and avoid the mailing date issue.) However, those are political issues that really don’t have much to do with the fact that people overspend, don’t like to think about things like fees and interest rates, and then blame the credit card company when they fuck up.

    If you think what Ben’s said is licking the boot heels of the industry, you’re insane. A consumerist website shouldn’t be just about shooting down every company as evil – it should be about producing wise, educated consumers.

  21. LearningForever says:

    @TCP100

    I agree with your statements. The using of credit cards can be benefitial to a person if done correctly. I gain cash back from my Chase Freedom card whenever I buy groceries. The lack of self control in a person is what leads to them being manipulated by the banks, corporations and society.

    Even though there really are people who go into debt due to bad situations like health reasons or even worst, being mislead by banks etc, there are many many others who simply are in the situations becuase they cannot stop buying out of their means.

    I do want to bring in another party that should share some part in our society being MAXXED out. They are the retail industry.

    I was in CA for vacation during Thanksgiving. Was in a shopping area where there are many shops like Bloomingdales, Nordstrorm, Neiman Macus and many other branded stores. That said, almost everyone had bags and bags of shopping in their hands. It leads me to wonder where these people get their money from and I still wonder about it all the time. A lot of people have been sucked into the world of consumerism. Where the retail chains have lure people to SPEND all their money and their future MONEY!.

    Look at Christmas. People show their affections by giving big and EXPENSIVE presents or many presents. When are those days where a box of candy will suffice.

    I think we have recently been conditioned to BUY even when it is not needed. Worst still, to throw away things that are still good.

    Ultimately I think we are our own persons,we make our own decisions. However, society and external influences can really play a part too.

  22. bnissan97 says:

    In reference to this comment:

    Personal Responsibility. Look in the (censored) mirror…. Society is not liable for the idiocy of an individual.

    Please define idiocy. People working menial wages cannot afford even the basics. So is it their idiocy to use a credit card or predatory lender to pay the heat bill? To put food on the table? To pay for that needed medicine? To pay borrow to pay the rent (in a low rent place) versus getting evicted? These things are basically necessities and people are forced to get these necessities on credit since they are not paid enough. Not because they were a spend thrift but because wages are pitifully low.

    What I feel is idiocy is citizens and politicians not wanting to pay a living wage then sticking it to the poor who have no other choice other than to use predatory lenders just to survive. I do feel it is societies personal responsibility to make sure that all have living wages. Then when someone is maxed out we can say, “You did it to yourself as you make enough to cover all your needs and then some, so you spent excessively.” When there is no doubt that people are using credit for things they don’t need versus just to survive, then lets have the “Society is not liable for the idiocy of an individual.” discussion.

  23. jefuchs says:

    This is a problem that has been created by demand. People these days want bling, and lots of it. If consumers were rsponsible with their money to start with, these companies would not exist.

    Note to America: You don’t need an iPod, or a camera phone. You really don’t. I’m quite well off, and I don’t have them. I could buy a top of the line Mercedes and pay cash if I really wanted to, but I know that’d be stupid, so I still drive my 14-year-old pickup truck.

    Lose the “gotta have it” mentality and keep your money in the bank.

  24. Brazell says:

    @bnissan97: You have the political opinions of like.. a 13-year-old myspace whore.

    Your description of young Republicans is so entirely off-based and fueled completely by ignorance. It’s a shame that you’ve graduated from college and have such a remarkably broken view of the world and those around you. For one, the idea that Republicans are — somehow — all millionaires is just completely untrue, the average household income of a generally Republican family is close roughly 20% less than that of a generally Democratic family; this crosses gender, racial, and ancestral lines.

    You need to wake up.

  25. bnissan97 says:

    “the average household income of a generally Republican family is close roughly 20% less than that of a generally Democratic family”

    Please provide me undisputed proof of this.

  26. Brazell says:

    @bnissan97: My apologies, the statistic is that Blue States (States that primarily voted Democrat) have an average household income ~20% higher than that of Red States (states that primarily voted Democrat). This is stated by Arthur C. Brooks in the book “Who Really Cares,” calling for increased donating spirit amongst Americans. Brooks is a self-described “progressive,” though he is not a member of the Democratic party. I mixed up the statistic and do apologize for that.

    But chiefly, what I wanted you do do was to ask me for proof of it. Since you’ve asked me for undisputed proof of that statement, would you mind offering undisputed proof of the following statements that you have made:

    - Republicans [unlike members of other parties], I feel primarily have funds to pay off their credit cards every due date. Please provide me undisputed proof of this.

    - Republicans [unlike members of other parties] aren’t generally in need, Democrats are. Please provide me undisputed proof of this.

    - Republicans have completed college, however [the] republican daddy paid the credit card bills, [the republican] daddy bought basic transportation and extravagant transportation. Please provide me undisputed proof of this.

    - [The Republican's] interview was a psuedo-interview, and [the Republican's] job is “arranged”. Please provide me undisputed proof of this.

    - Republicans [unlike members of other parties] can afford expensive things because they don’t want to pay wages [by the way, what somebody "wants" to pay and what they "do" pay are two different things]. Please provide me undisputed proof of this.

    - Republicans “skrew” the common folk. Please provide me undisputed proof of this.

    - Republicans are the cause of predatory lending. Please provide me undisputed proof of this.

    - Republicans justify predatory lending because “Jesus wants this”. Please provide me undisputed proof of this.

    - Republicans are to blame for many people being maxed out. Please provide me undisputed proof of this.

    If you’re going to make unqualified, ignorant statements about large groups of people, please don’t not request proof of something that somebody else says, when you obviously cannot provide it for your own statements. Maybe what you said passed for political commentary in your closed-minded circles of hate, but not elsewhere.