Credit Card Movies: How to Fund Cinematic Dreams

A lot of American success stories began with creative entrepreneurs who used credit cards to jump start their businesses and Hollywood no different.

Not only is it known as Tinseltown, it’s also a heavy credit town. Movies are made by getting money from producers on the promise of a big return on their investments. But there are a lot of expenses involved in shooting, producing and editing a film as well as all the post-production costs. Indie filmmakers sometimes have to be very creative to fund their movies. The big payoff though, is that some of those low-budget movies end up making millions.

Director Robert Townsend funded part of Hollywood Shuffle with his plastic and the money he made acting in films and commercials. Spike Lee busted out on the film scene because of the credit gods. Horror film The Blair Witch Project was made with credit cards and put the filmmakers heavily into debt, but it made a fortune.

If you have your eye on Hollywood with hopes of making a successful Indie film, you will need to have good credit if you plan to finance it with a few high-limit credit cards.

CREDIT CARD STRATEGY

Hollywood Shuffle grossed more than $5 million in the months following its release and made Townsend a household name. But if it wasn’t for his credit cards, the movie wouldn’t have been made. He reportedly applied for five bank credit cards and combined them with store credit cards he was already using. According to reports, he bought raw film stock with his MasterCard and used his Saks card for wardrobe. In lieu of paying his cast and crew salaries, he would fill their cars with gas using a Mobil card.

Ultimately Townsend charged $40,000 on 15 personal credit cards to make the movie. Townsend’s last plastic expense for the film went to catering a lavish buffet and renting a theater to screen a rough cut to various studios in the hope of attracting a distributor. Samuel Goldwyn, Jr. gave him a check for $40,000 to pay off his credit card debt.

Spike Lee maxed out his credit cards to make his first movie, She’s Gotta Have It in 1986. It launched his career as a director. Kevin Smith drained his credit card to make the 1994 film, Clerks. The film was shot in the convenience store where he was working and he rang it up for $27,000. Director Robert Rodriguez maxed out several credit cards to cover $7,000 in production costs for his 1992 movie, El Mariachi, which grossed $2 million at the box office. The Blair Witch Project (1999), was funded almost exclusively with credit cards bringing in $35,000 in debt but made more than $250 million.

Dun & Bradstreet generally recommends that small businesses use loans instead of credit cards for a long-term financial strategy. But for some folks, business credit cards might be the right approach for both long- and short-term financing. Many filmmakers keep tabs on their personal credit scores, pay off the balances regularly and use 0% cards so the credit is there when they need it.

TRANSFER BALANCES

Esther B. Robinson combined private equity, public grants, and credit cards to finance 2007's A Walk Into the Sea: Danny Williams and the Warhol Factory.  For seven years she kept $12,000 worth of credit card debt through production. She would wait until a credit card company sent her an offer for a card with 0% interest on balance transfer, and she would move the balance.

Filmmaking is a gamble, but filmmakers who believe in their projects are still coming up with creative ways to finance their cinematic visions. The risks are greater for first-time directors, but the rewards can be extraordinary. Paranormal Activity, which was made for $15,000, took in more than $193 million at the box office. How’s that for a profit margin?

Michael Germanovsky is a personal finance expert with in-depth knowledge of credit cards, charge cards, and pre-paid cards. His tenure as a personal finance expert began at the Novoye Russkoye Slovo, a partner of the New York Times International Weekly. In 2011, Germanovsky created the Student Credit Card Education Initiative and sounded awareness of high interest rates. At large, Michael is editor-in-chief at Credit-Land.com.