Sunday, April 5, 2009

Maxed Out

One comment left in one of my previous posts suggested that I watch the documentary "Maxed Out".
Well I just watch about the last half of it I think, on Showtime. It's just sobbering.
Not only because so many Americans owe so much money as I do, but that many more owe more money!
Also the credit card practices make it so easy for people to be tempted. Even dead people get credit card applications!
Something that struck me even more was that the documentary makers were pointing out that credit card companies charge 30 to 45% interest rates on credit cards for those high-risk customers, and that at those rates they would never be able to repay their debt.
So I wonder what are my chances of paying off all the money I owe if my interest rates START at 55% or so. I imagine that I'm still a regular customer to my credit cards since I'm staying on schedule and are not so far behind. It drives more the point that I have to pay off those high interest credit cards first or somehow get that debt into a lower rate.
I didn't get to see the whole documentary, but I saw Dave Ramsey and Suze Orman clips there. At least one clip of Suze was put on a negative way. She was saying that the most important part of your credit report is the FICO score (whatever that is). It was then followed by a statement that the makes of the FICO score are her biggest sponsors. Then it was said that the FICO score formula is a secret and that most credit reports have a lot of errors on them. Errors that credit companies don't want to fix because it goes against them.
I didn't see anything bad about Dave Ramsey, but I didn't see the whole documentary. So far i've seen him on TV while I was in the US and his advice made sense to me.
On the other hand , VIP customers like judges, congressman and actors do get their credit reports 100% accurate and with no errors. Someone handles their reports and cleans them up so as not to have trouble with them because if they did they would draw attention to the errors in the current situation.
I was surprised at the number of people that committed suicide pressured by their debt. And how others were considering it. I thought bankrupcy in the US would be a good way to end that and start over, get a second chance.
I wish I could turn the risk piramid over and give people a chance to pay their principal without paying so much interest. Just like on the company coop where our interest rate is 12% and at the end of the year we give almost half of those interest back as savings into their own funds. It's bad enough to owe a lot of money to then be tricked again by some other company into turning their debt over to them only to find out you are going to end up paying more for it than originally. Frankly getting out of debt requires a lot of things to happen right.
I also noticed just how many people say "I don't know how I got into this". I think we all suffer from credit memory loss when we are swiping the plastic, and since the bill comes a month later we have long ago forgotten about it. That just shows how those purchases really don't fill any needs, just wants. Sure there are times when you really use it for emergencies, but I saw people doing big garage sales getting rid of plates and other "wants" that they had accumulated over the time.
Well, the show was very interesting. I hope to see it complete soon. This blog is free.  

1 comment:

Alita said...

Hola! Que bueno que pudiste ver el documental, es muy bueno y te abre los ojos. No sé si lo rentarán en Mastervideo o en Metromedia, talvez podrías preguntar.

Sé que el documental parece un poco desalentador, pero sigue adelante, con persistencia se puede lograr todo ;)