Raymond Reiss

January 3, 2009

In the early nineties, we were $20,000 in credit card debt and paying something like 18.5% or 21% interest on each one. We got out by getting new cards with "come on" low teaser rates for 3 months. We transferred the most expensive debt to the cheapest card, and then paid as much as we could as fast as we could on the card with the highest interest rate. We would make progress on that card, while making just minimum payments on all the other cards. Whenever the teaser rate period expired the company would then charge a predator interest rate, so we cancelled that card and transferred the amounts to yet another new teaser card with a new low rate for a new 3 month period. As the debt for one card was completely eliminated, we would turn other attention to the next card with the highest interest rate and "double up" on that payment so the total amount sent to all credit card companies remained the same. I think we opened and closed maybe 6-8 new credit cards like this before we paid off all the debt. I do not feel we had to cut back on our lifestyle too much,

Once out of credit card debt we started saving money and paying cash. Having a "rainy day fund" is key to handling all of those unexpected bills that come up that get people into credit card debt - like $500 deductible on fender benders, new tires, major repairs, etc.

Eventually we found credit card companies that pay you back. I like them and use them for everything, but my wife doesn't because the monthly bill is so big and all the cash runs out once a month. She says she doesn't know how to budget her spending, but then she does like it when we can deduct $80 to $100 off the bill. Our cards are all paid off completely every month. I have not tracked the companies computations, but I highly suspect they are not accurate in computing the "cash back" amounts people are entitled too.