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Friday, May 24, 2024   

Debt Daredevil
by Scott Bilker
Scott Bilker is the author of the best-selling books, Talk Your Way Out of Credit Card Debt, Credit Card and Debt Management, and How to be more Credit Card and Debt Smart. He's also the founder of DebtSmart.com. More about and DebtSmart can be found in the online media kit.
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Scott Bilker


I am new to your web site and find your tips informative. I am, however, interested in your opinion of other financial wizards and their money management tactics, such as Suze Orman. She seems to be very conservative in her methods and you seem to be more on the risky side.

There are also the Consumer Credit Counseling Services across the states that also lean on conservatism. How would you rate your methods in comparison to theirs? 



Glad to hear that you like what you see here at DebtSmart.com!

I've always thought of myself as a credit card and debt vigilante, but the media has always referred to me as the Debt Daredevil™. That reminds me of Spider-Man. Remember how Peter Parker wanted to call himself "The Human Spider" but the ring announcer introduced him as "Spider-Man?" Yes, I just compared myself to Spider-Man. It may be a stretch, but it keeps the topic fun. (I'm guessing you can tell that I'm a fan of superhero comics.)

Anyway, credit counseling companies may seem conservative. However, there are potential risks involved with using their services. In fact, The New York Times once ran a front page article titled, Not-for-profit Credit Counselors Are Targets of an I.R.S. Inquiry. A credit counselor's record must be carefully evaluated before choosing a company. You should always check with the Better Business Bureau (BBB.org).

Next, I'd like to tell you that I really enjoy listening to Suze Orman. She's a straight-shooter. She gets to the root of people's financial and even personal problems. When I listen to her TV show, I've compared what I would recommend for her callers with debt problems to what she's said, and for the most part, our advice is very similar. I would say that 99 percent of the time Suze and I are in complete agreement. I would personally recommend any of her books!

It's interesting that you would describe my methods to be "more on the risky side." I completely understand how many people might see my approach to debt in this manner, but on the contrary, I see my debt strategies to be far less risky and costly--it just depends on your definition of risk. The American Heritage version is, "The possibility of suffering harm or loss; danger."

Actually, I believe my strategies would be more accurately characterized as unconventional, cutting-edge, bold, and effective, rather than risky. 

For example, many people would say that the advice to "cut up your credit cards" is conservative. Their reasoning is that if you cut up your credit cards, then there is no chance of "suffering loss" by using the cards in the future; therefore, cutting up cards is conservative. 

I don't see it that way at all. I see cutting up your paid-off credit cards as being risky. When you cut up your credit cards, you cut out your options! My advice would be to keep paid-off accounts open, as long as they are not charging you an annual fee.


What typically happens is that someone consolidates their debt onto one low-rate card then closes all the accounts they paid off. Later, the one bank that consolidated all the debt raises their rate to like 29 percent, and the person is trapped at the high rate with no other banks which to transfer their balance! In essence, there is a greater possibility of suffering a loss by cutting up your cards!

Another recommendation I've made that financial "experts" have perceived as "risky" is to consider financing your car purchase with a credit card. Your credit cards are simply another financial option, and to neglect considering (that's the key word, "considering") using your cards would be an error. I don't mean going out and buying a brand new Hummer with your credit card (although it may be possible). When I say "new" car I mean a new-to-me car, which is a used (pre-owned) car.

Just as there are advantages and disadvantages with nearly everything you encounter in life, so are there risks involved with your choices as well.

Risks when financing a car with a dealer: 
1) They don't give you the best rate because they're splitting the profit from the added interest costs with their financing company.
2) You must carry specific types of insurance that are more costly.
3) Car can be repossessed if you miss payments.

Risk when financing with your credit card:

1) You increase your credit card debt.
2) .Rate is probably not locked-in.

More about this topic in my article, Consider Financing Your Next Car with a Credit Card.

I've even been criticized for advising people to transfer their balances to a lower-rate credit card! There are some people who feel that this is risky because, "it's borrowing from Peter to pay Paul." What's the difference to whom you owe the money? The way I see it is that if Peter is going to give you a better rate, then pay Paul back with Peter's money!  Hey, Paul is getting paid back either way.

It's my belief that as people learn about their options with credit, they will see that what I've done and the methods that I talk about for reducing debt are not risky at all. In fact, they are conservative approaches that are less expensive and more effective when weighed against their alternatives.

Keep watching DebtSmart.com for new adventures of the Debt Daredevil™.

Debt Daredevil™



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