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Maxed Out - the Movie You Can't Afford To Miss

Updated on March 23, 2008

I watched an excellent movie last night - one that I recommend to anyone, called Maxed Out. "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." Maxed Out is more of a documentary that left me feeling scared for America. This is one movie that I think everyone should be required to watch.

Debt in this country is out of control. I know very few people that don't at least have mortgages and car payments, which is usually more debt than they can handle. This causes people to rely on credit cards to get by. Credit card debt is so common these days - much more so that just a few decades ago. According to Maxed Out (released in 2006) the average American has more than $9000 in credit card debt and pays over $1300 a year in interest payments on this debt.

Here are some interesting facts I learned from watching this movie.

  • There are 4 billion credit card offers made each year.
  • Interest rates have risen 160% over the last 5 years.
  • From 1994-2004 over 10 million Americans declared bankruptcy.

These are scary facts if you ask me. Although so many people are filing for bankruptcy, credit card companies are still making massive amounts of money each year off of people. Most people do NOT pay off their credit cards each month. They carry balances that net the credit card company money in interest and fees.

Many people have to use their credit cards to cover necessities such as housing, insurance and transportation. It doesn't take long for these credit cards to become maxed out, which credit card companies love. They love this because then they can charge an over limit fee on top of all the interest they are charging. And if you are late on your payment that will be another fee - up to $40 per time. By the time you make your payment you could have incurred $80 in fees plus interest.

A person who is struggling to get by won't have the money to pay all these fees and they will never get their credit card paid off. The cycle will never end, especially if you make only the minimum payments. On average for every $1 principal payment the credit card companies get $2 in interest and fees.

One of the fastest growing industries on Wall Street is debt collection. You see after six months of not paying on a credit card the credit card company will charge off your debt. This does not mean that you don't owe it though. The credit card company just assumes that they will not get any money from you. So they sell this debt to collection agencies for pennies on the dollar. The credit card companies make at least some money back this way. And the collection agencies get rich.

It is perfectly legal for collection agencies to call you and harass you for money owed. Not only can they call you, but they can call your neighbors and family as well. They don't give up easily either. Believe me I know. Whoever had our phone number before we moved to Ohio and were given it must have had a lot of debt that he didn't pay. Those collectors won't give up on trying to contact David, whoever that is. They have even argued with me as to whether I know David. Imagine if we really did know David - how embarrassing is that for these collectors to be calling friends and families of a person struggling in debt.

This tactic works though. The collectors prey on people's fears and insecurities and they do not give up on collecting money for debts they have bought. The more debt someone has, the more opportunity for a person to be delinquent, which means there is more opportunity for a collector to collect.

One of the things that bothers me so much is how the credit card companies prey on college students. They come to campus and convince people to "just fill out the form" so they can get a free t-shirt or water bottle. What the student doesn't realize is that they will soon get a credit card in the mail, and being the naive and broke college kid they will use it. Even if the student does not have any source of income they are still frequently approved. The debt cycle starts early in America - thanks to the credit card companies.

One of the saddest parts of Maxed Out was the interview with two moms of college kids who had committed suicide because they had gotten started using credit cards and got in over their heads. Neither student could see a way out and both hung themselves in their dorm rooms. This is one of the many tragedies happening all across America - because of too much debt.

Families today are maxed out on debt. It really is a vicious cycle and once you start down that path of borrowing money, it is hard to stop and break the cycle. For many it will be a lifelong struggle. The best solution I see for a person to get ahead in America, especially in light of the rising costs of everything but housing, is to never go into debt to begin with. This of course, is easier said than done, maybe even impossible for some.

I do firmly believe that many, many people make poor choices and borrow money for things they don't need and can't afford. Look at all the dealers that sell boats, ATVs, snowmobiles, etc. All of these things are fun yes, but needed? NO! It isn't just the big ticket items though. Many people nickel and dime themselves into major debt. They use the credit card for everything from fast food and clothing to medical bills and college classes. I knew a woman in college who charged a brand new Jeep on her credit card. She was 20 and had no source of income at all. I wonder if she is still paying for that Jeep.

Unfortunately when most people become adults at the age of 18 they just don't know enough to stay out of debt. It doesn't occur to them that if they don't have a job they won't be able to pay for the things they charge. A person that age typically does not have the life skills to make good decisions about credit cards. With the credit card companies targeting young adults so heavily it is very difficult for that age group to avoid it.

I believe that one of the ways to stop people from going into debt and hopefully teach people to not ever start going into debt would be for them to watch this movie. Maxed Out does an amazing job of showing exactly how the financial industry, credit card companies and collection agencies really work. They are totally in it to make money, not to help the customer.

Maxed Out also talks with many families who have faced financial crisis due to credit card use - from collectors calling, to losing their homes, to filing for bankruptcy. You will see what all this debt is doing to America. We can't afford it and it is ruining our nation. This movie will shock you and scare you. Which is a good thing. Hopefully it will scare people into making the right decisions and doing what they can to get out of debt, while doing everything they can to take on no new debt.


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    • profile image

      dafla 9 years ago


      Another great article. I'm trying hard not to slip back into the debt cycle, but because of life circumstances, I may have to have a car payment (which I really cannot afford) for the first time in 20 years. No way can I pay more than my car is worth to have it repaired again. Anyway, it's 16 years old, so about time to give up the ghost on this one.

      It's really stressing me out worrying about how I will be able to work without a car, and how I will be able to eat with car payments and bigger car insurance payments. It's a Catch 22 for me, a lose-lose situation.

      I had hoped that my internet activity would bring in some extra money, to help me defray some of the costs, but so far, not so good.

      It's terrifying to be in this situation, but there are a lot of people who have it worse than I do. The worse thing that can happen to me is that I will have to finally clear out my junk and get a couple of roommates. I don't want that either, but I really don't have a choice. After being debt free except for my mortgage for 5 years, this is a big crisis for me.

    • Hovalis profile image

      Hovalis 9 years ago from Australia

      Jennifer, following your recommendation I watched this documentary last night. It is truly scary! We really trust too easily in these big companies, forgetting the reason they are in business, and that is to make money. It's even more concerning that they make their money off those people they have literally put into perpetual debt. I kept on asking myself where their moral centre was, and I couldn't find it.

      Thanks for this hub. It was very, very eye opening.

    • dataminer profile image

      dataminer 9 years ago from Ninety Six,SC


      Nice informative hub ,it's truly an hidden truth that needs to be told

    • Jennifer profile image

      Jennifer 9 years ago

      Yes Vic it is sad. The movie talked about that a good bit. About how the government keeps having to borrow from social security to pay the interest on its debts. Very sad and that is why the social security system is running out of money - the government keeps takiing it for other purposes. I got the movie from my library, check there first.

    • vic profile image

      vic 9 years ago

      You publish some of the most informative hubs. This movie sounds very interesting to watch and I will. It is sad that our government, which is the main role model for our citizens is fiscally out of control and maxed out too at over $9,000,000,000,000 debt. Thank you for the hub.