If you don't already hate banks, credit card companies, and the government, you need to read this book. Written to accompany the recently-released documentary Maxed Out, James D. Scurlock provides an in-depth look at everything that is wrong with the financial industry today, and how it's affecting ordinary Americans.
Scurlock begins his journey in Las Vegas where he speaks with personal finance guru/anti-debt crusader David Ramsey, and goes on to describe meetings with a family who lost a loved one to credit-related suicide, a young man who killed his family over credit card debt, a wealthy Las Vegas Realtor capitalizing on the appetite for big houses and bigger mortgages, and numerous other stories of real-life credit card chaos.
The book focuses on the industry of predatory lending which, we quickly come to learn, has become the industry of choice for banks and other lenders: They've discovered that it is a lot easier to get rich lending money to people who can't afford it. Credit card users who pay off their balance each month are labeled dead-beats. Scurlock quotes a Vice President at MasterCard who provides his definition of a preferred customer: ...an individual who has a 'taste for credit,' i.e., someone 'willing to make minimum monthly payments - forever.' The effects of predatory lending are also evident in the collapses of some of the large subprime mortgage lenders like NovaStar Financial, Inc. (NYSE: NFI), which fell from a 52-week high of $38.49 to its current price of $5.34.
What's striking to me is how far we have come as a society from the Puritan ideals of saving and hard work, when taking out a loan was considered immoral. Many Americans would be far better off financially if we went back to that world. Scurlock also draws an interesting connection between the credit woes of working Americans and the huge debt load taken on by our elected officials in Washington. Dave Ramsey provides insight into that: "Is it any surprise that people who go into debt elect people who go into debt?"
Unfortunately, the movie is not currently playing anywhere near where I live. Maxed Out is definitely essential reading for the American consumer.
What's more amazing about it is that Scurlock has managed to write an entertaining, funny book about credit. I've recommended it to several of my friends, all of whom have had a similar response: "Wow, a book about credit cards? That sounds fascinating. I'll get to it as soon as I finish my copy of the history of can-openers."
But anyone who takes me up on my suggestion to read this book will find that it is both informative and interesting.
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Reader Comments (Page 1 of 1)
3-28-2007 @ 10:19AM
Matthew Rogers said...
Regarding debt. No one is forcing people to max out their credit lines, go after the bigger house through an exotic loan or live their life in debt. We have become an instant gratification society and now that people are struggling to make ends meet after years of having a big screen tv or driving a BMW when they should be driving a ford and they are looking for the Government to bail them out. People need to take a look at themselves and realize that the debt that they carry is their own fault and their own responsibility to take care of. Banks, credit companies and such are in the business to make money there is nothing wrong with that. If you do not like the fact that they want you to carry a balance on a credit card, then DON'T! Pay off those cards, live below your means, hold off on the big ticket purchase and save some money. If the government steps in, it will cost all of us a great deal because we will have to support those that could not control themsevles and those that could not control themsevles will get into the same trouble again because they know that the government (read those of us that pay taxes) will bail them out again.
4-12-2007 @ 4:28AM
Graham said...
Reading between the lines, I came to the conclusion that our society is indeed as much to blame as those who are taking advantage of it by any means necessary. Take for example the poetic conclusion to the end of chapter 2 (? - I only started reading this book yesterday and I can't remember if this statement was from the end of 2 or 3); in which the property investor states her concerns over the possibility that her home will become increasingly unaffordable. Scurloch probalby knows his audience therefore he would believe that there is no need to clealry state, in no uncertain terms, that we must take ownership of this mess that we have gotten ourselves in, via the blessing of the banks.
What goes up must come donw. Something has got to give. I live in Australia which is a terribly credit driven economy, but it can't keep going the way it is. I hope to never get a home loan, I don't mind renting for the entirity of my life and I do not intend on having children, so who would inherrit the house if it were to be paid for in full?