On Sunday morning I ended up watching Maxed Out, a documentary that attempts to uncover the nastiness that we know as our credit lending industry. From Showtime's website:
"This revealing documentary blows the lid off abusive consumer lending practices that find some banks, mortgage lenders and credit card companies knowingly extending high-interest products to debtors that are bad credit risks in hopes of foreclosing on their homes or reaping other "obscenely profitable" benefits from drowning their own customers in a sea of debt."
If you haven't already seen it, you must site down and watch it because it'll blow your mind. Not only will you be amazed at the insane practices of the credit and banking industries, but you'll be amazed at how our government has 1) done nothing about it and 2) gotten themselves into their own debt crisis where even they can barely pay their monthly minimum on their debt.
The problem seems to be twofold to me. First, you have the credit card companies offering credit to people who shouldn't be getting credit. These credit card companies make their money off of late fees and interest payments and WANT you to be late. If you're the type of person who pays off their balance in full each month, you're worthless because the credit cards aren't making any money from you.
The second problem is the lack of consumer education. Just look at how many college students get themselves into massive amounts of debt because they signed up for a credit card to get a free t-shirt, only to find themselves in thousands of dollars of debt months later because they don't understand how credit cards work. Since efforts to ban credit card companies from college campuses have failed, maybe the solution is to require credit card companies to hold educational classes to any student that it signs up on campus and students won't be able to receive actual cards until they've taken the educational course.
All in all, the documentary was eye opening, saddening and educational. I don't know if people in other countries have the same type of debt issues that we do here, but our debt problem is growing and doesn't seem to be going anywhere anytime soon.
(if you don't have Showtime, you can purchase Maxed Out on Amazon.com
6/16/08
Maxed Out on Showtime - Watch it
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2 comments:
Here in the Netherlands the credit cards are totally different than in the U.S. The cards are tied to a bank account and when the bill is due, the total is just automatically deducted from the bank account. So when your bill arrives in the mail, it is more for information - you don't have to take any action to make the payment. Everyone is used to this system so I am not aware of debt via credit cards being a problem. There are very few shop-specific cards though many stores do offer credit or payment plans, but again it is normal that the total amount due per month is automatically deducted from your bank account.
I was torn by this stuff. Yes, I think there are some confiscatory rates and bad lending practices. But you are ultimately responsible for your credit choices. I don't buy on credit unless I know I can pay the debt. Even though I have been out of work for almost two years, I still pay my bills because all my adult life I have saved. It is something that people don't do anymore, and that is their fault. I didn't have a cell phone until I was 35 years old. I don't smoke and I drink in moderation. Make your choices and live with them. I'd like to see the cell phone, cigarette, fast food, and beer receipts for some of these people who "just can't pay those big, mean companies" for the money they used. The same goes for health care. I am happy to see you get care, but prove to me you are spending the same amount on your own health care as you are on your entertainment and vices. Otherwise, tough shit. Not my job to pay for you to be lazy and stupid.
Lastly, WTF is that idiot putting in the comment about George Bush not giving funding to the troops for body armor? The Congress (opposite of progress, look it up) sets the budget, you dumb fuck.
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