Apr 20, 2007

Invaluable findings on credit debt uncovered

By Terri Schlichenmeyer / Book Reviewer

"Maxed Out"

By James D. Scurlock

Scribner

$24.00, 248 pages

Retail therapy is a wonderful thing.

One trip to the store, one peek at drills and suits, diamonds and dresses, and you can go home with lots of new possessions, some of which you didn't even know you needed.

And what do you do when there's nothing but dust in your wallet and pockets full of lint? You turn to that age-old rallying cry: "CHARGE!!"

But, hold on. Before you whip out the plastic, read "Maxed Out" by James D. Scurlock. This book will save you a whole lot more than 10 percent on your purchases. It might save your house, your family and even your life.

When an offer for a six-month no-interest credit card comes in the mail, it is awfully tempting, almost like free money. You fill out the form, drop it in the mail, and the credit card comes right to your door. You start to use it, and maybe you miss a payment or two. Or three. Soon, you are up to your forehead in fees.

Then another credit card offer comes in the mail ...

Because of a reluctantly admitted, youthful bout with scary debt, Scurlock decided to make a documentary about Americans and debt. This book is the companion piece to that film, and it is sobering.

According to Scurlock, incomes have risen about one percent during the past generation, while household debt has increased to over 1,000 percent. Scurlock cites the Federal Reserve in saying that 12 percent of young families were more than two months behind on their debts in 2004. With new bankruptcy laws, that figure has undoubtedly gone up.

Scurlock interviewed people in the industry and found, to his shock, that credit card companies and big banks encourage debt-to-the-extreme. Fees and "extras," such as un-needed insurance, are tactics banks use to make their money. For instance, although Scurlock says they take little to no time to process, there's a reason that bounced checks come with a $25 or higher bank fee.

On the other side of the teller's window, Scurlock interviewed people who were deeply in debt, a man imprisoned for murdering his family over a $5,000 credit card bill, a handicapped woman whose house was in imminent danger of foreclosure because of bad advice, and the family of a woman who drove off a pier because of her out of control gambling debts.

I've read an abundance of horror novels and thrillers this year, but "Maxed Out" chilled me like no other. Scurlock burrows deep into the financial industry and what he finds will make you want to take a pair of scissors to everything in your wallet.

Through on- and off-camera interviews, Scurlock exposes collections agents, financial experts, government agencies and others who make money off your money, and he's compassionate when he writes about "victims" who are swimming in credit but drowning in debt.

If you own a credit card, leave it at home, and get out the cash to pick up "Maxed Out." You'll long be indebted to Scurlock for the things you will learn.