11 Years Later – No Credit Card Debt


This month I finally paid off all credit card debt I’ve been hanging onto since various crazy entrepreneurial excursions in my past life.

About 3.5 years ago I contacted a debt management company [non-profit] that helped out a lot. I paid them $39/month to be a customer of theirs, but it was worth it, because they were able to negotiate my interest rates down with all the credit card companies I had outstanding debts with (totaling ~$23k). I closed out all 5 credit cards and then paid them a lump sum $500 each month that was EFT’d out of my bank account each month. I was on a 5-year plan to pay off my debt at that rate. When you work that out, it’s $30k — on $23k debt — which honestly was more like $18-$20k in debt, but the finance charges were really adding up.

Out of the 5 creditors, HSBC was the best – they had me at 9.99% on my ~$4k debt, and they received notice that I was trying to be responsible and get out of debt by hiring a debt management company, and they wrote me saying they were going to charge no further interest — 0% for rest of the debt! I have told that to many people and spread good will about HSBC.

I’m sure some of you have plenty of debt and think there’s no possible way to get out of it. Well, there is a way. The problem with the USA and society is that we just buy what we want, when we want, even if we don’t have the means to afford it. The other problem with us is that when we come into a lump sum of cash from something, we think, “Oh my god! I just got $1,200! What am I going to spend it on?! The new flat-screen or a down-payment on that leased ’08 automobile?!” No, you should be saving and investing it — even if in a CD that earns 3% — interest accrues interest accrues interest.

Spending the money on something totally not necessary is the worst thinking — and that’s why the majority of America is in debt. I use to always say I’m living my days to their greatest extent, because “I might not be here tomorrow.” Well – truth be told for most of us – you’re going to be here tomorrow. And the day after that. And 20 years after that.

If you’re not saving money, or actively working to pay off your debts so that you can save, you’re doing yourself an injustice.

Did you know that the average wealthy person spends ~8.5 hours per month managing their finances (budgeting, finding better interest rates, paying bills, etc), and the average poor/lower/middle-class person spends ~1 hour per month? You know those people that are in super healthy shape and jog every single day, even though they don’t need to? They probably spend 25 hours per month doing a good cardio work-out, while the average overweight person spends 3-5 hours per month of cardio — likely not even as good work-outs.

The real wealthy people in this world aren’t buying $5,000 suits and the latest Porsche. Those are the people making big salaries, but don’t have a pot to piss in. (ok, not all – but they aren’t being very careful with their finances – they are living a life of luxury, that they most likely couldn’t sustain the rest of their life if they lost their job today). I recall hearing around the time eBay went IPO that Pierre Omidyar, sitting on billions of dollars in stocks, drove a Volkswagen Jetta. I imagine the same is true for Warren Buffet, Bill Gates, and tons of other truly wealthy people out there.

It’s all a mindset — and if you want to change your mindset and perception — I highly recommend a quick book (30-60 min read) called The Richest Man in Babylon by Clason ($0.75 used at half.com). I was never taught the mindset in that book by my parents. You either are raised with that mindset, or you aren’t — in my case, as a cocky 18 year old (with my brand new sports car I leased as soon as I got my first real job that paid nearly 1.5x my Mom’s salary), I lined up 5 credit cards and couldn’t get my head above water.

That book is the greatest piece of advice I could give anyone that’s in debt — and either thinks they have no hope of getting out of it; or thinks they can get out of it (but years later find they are still in debt — and won’t face the fact that they are an over-spender and not AT ALL focused on getting out of debt, because they think they’re going to “make it someday” by some crazy means).

The other book I recommend reading (at least the first 20 pages — you can likely skip the rest of the book) is the Millionaire Next Door ($0.75 used via that link).

This financial life isn’t a sprint, it’s a marathon. Rich and wealthy are two different things — go become wealthy — yes, even on your measly income (if you feel it’s measly) — you can become wealthy.

Special thanks to Eric – he recommended both of those books months back, I stalled for like 4 months before I finally cracked it open [Babylon book], and then I kicked myself for not reading it earlier. Eric has attempted for many many years to show me a different mindset.