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Goodbye to Credit Card Debt! |
After sending out an e-mail on the topic of Credit Card debt I received the following e-mail from one of my readers and it grabbed my attention as a really great 'Success Story'. I hope many people will find it to be not only encouraging, but also very useful in giving them direction on how to get out of the Credit Card debt trap.
Greg Roles was cruising along quite nicely until a divorce totally brought his finances crashing down around his ears. He ended up with Credit Card debts that were unmanageable and nobody seemed prepared to help him even though he knew he could get back on his feet if someone would just give him a break. The problem was, nobody at any of the banks he visited seemed to care. Their hands were tied behind their backs by red-tape and central processing systems that could not think outside the box.
BUT
Armed with one piece of powerful information and a copy of Simply Budgets he is changing everything for the better. ABy the end of the year he will have achieved all of the following:-
Cash Flow Positive
Renovated his house
Enjoying life
No Credit Card
Savings in the Bank
Zero Bad Debt
Worry Free
Looking for an investment property
Here is Greg's e-mail.
Hi David,
First up, I'd like to congratulate you for the years of work you have put into
helping people turn their financial situation around. Your seminars and products
as well as your informative and interesting e-mails are exceptional. As a long
term user of Simply Budgets I can honestly say it has been the single greatest
tool for reaching a place of financial "peace" for me. I bought it several years
back, thinking it was a good idea to "be organised". Little did I know just how
invaluable it was going to become!
Sadly a
divorce in subsequent years, was a real backward step financially (on top of
everything else!), and the program quickly became the only way I could work out
how to survive. As depressing as it was to constantly work out my future
shortfall, it was at least empowering to know how much I had to find, and that I
knew exactly what was going on, rather than ignoring it and letting my
imagination run riot. It's amazing how when you know you just need a few hundred
here and there what you can find to sell on E-bay!
I ended up in credit card debt, not as bad as your newsletter described, but
having enough that I was going backwards trying to make minimum payments,
struggling to keep my house and just to make ends meet. And yes over half that
debt was "feel good" illogical purchases given my situation.
Deciding to turn it around, despite a rather decent income no banks were willing to touch me as I was too heavily committed. "I know; that's why I'm here!" I would say. I tried virtually every major banker via a broker mate of mine, and through Simply Budgets knew that if I could consolidate the "bad" debt, I would actually become cash flow positive. That aspect of the software was the greatest thing for me, and made me keep struggling on when it all seemed hopeless.
I kept looking
around for the answer, and was amazed that my accountant, and even the "great"
Noel Whittaker's company wasn't interested in helping me, as despite his books
they only look after people with property etc; the "rich" basically. I was
amazed that despite sticking my hand up and asking for help (doing the right
thing), very few people are willing to assist. I've no doubt your CashFlow
Clinics would have been a huge help in hindsight. What I was lacking was
education.
My life turned around when I learned that both the Bank of QLD and Bendigo banks
are independent franchises. Suddenly I could sit down with the ACTUAL manager
who could make decisions without a "central processing branch" impersonally
knocking me back. I walked into my local Bank of QLD armed with several ‘Simply
Budgets’ scenario's and had a good chat with the manager. The outcome was that
he saw what I was trying to achieve and why I didn't tick the normal boxes and
he was very, very impressed with my pie graphs and detail from your program. I
have no doubt it was pivotal in him agreeing to refinance me, despite not
fitting "the box".
Just 6 months down the track and I'm now cashflow positive, renovating my home,
and enjoying my life. I have learnt a valuable, valuable lesson and am nearly at
the stage of never needing a credit card again with savings amassing in a Visa
debit card account. By years end I will have enough savings and cashflow to
consider an investment property and will have absolutely zero bad debt. Sure I
have an increased primary mortgage, but the cash I used to have to find for all
my debts more than covers the repayments plus enough extra to put me ahead of my
previous lesser amount. It's an unreal feeling not to have to worry anymore; at
all. THAT is why I now consider myself "rich".
Thankyou David for your amazing software. Why this isn't part of the High School
system today amazes me. As an ex-school teacher, I can't think of any subject
more important! All the best and I hope your readers who are in trouble with
‘debt’ will have success through approaching each Bank of Qld and Bendigo bank
till someone says “yes”.
Bank of Qld
will have all my investment business, even if the major banks can do a slightly
better deal, for they were willing to help me get back on top, and I look
forward to paying that back in coming years, a lot!
Sincerely
Greg Roles
Brisbane.
I felt compelled to call Greg and get more information
about how he got into and out of debt. Click on the button below to hear our
phone conversation.
Interview with Greg Roles (20 mins).
If you missed the e-mail Greg responded to I have reprinted it below.
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Credit Card Problem I have been really concerned by the recent rise in the number of people e-mailing me asking for advice regarding their current debt situation. Total personal Credit Card debt levels between $50,000 and $100,000 is something I find both distressing and amazing (that's an understatement!). For people in this situation it is probably a bit of a surprise that the situation has actually gotten so far out of control. It is SO hard to dig yourself out of a financial hole this deep once you have dug yourself into it. Interest payments compound to be like lead weights tied to your ankles making it harder and harder to move forward! Now I am not going to make excuses for these people. While I am sure there were some valid purchases that went to make up this much debt I am also certain there were some 'not so valid' ones as well. However, this is a whole separate topic in itself. What I want to focus on today (and what really gets me cranky), is the way these people are treated when they realise they are in trouble and start looking for a solution. Applying for a personal loan to consolidate all of those 'high interest rate' Credit Cards into one manageable debt is usually met with the response "Sorry we can't give you a personal loan - You are a bad risk". The way I see it, the last lender to offer someone more Credit (read Debt), obviously should have assessed whether that person was in fact a bad risk or not and whether they could comfortably manage the new total level of debt. In that case, logic would say that the last lender to approve more credit or debt should automatically have no problem with consolidating all of that person's debt into one single loan at a reasonable interest rate (no more than 15%). I have raised this issue before and 'A Current Affair' invited me on their show to talk about this at that time, but nothing has changed. Can I urge any of you who feel the way I do to write a letter to the Federal Assistant Treasurer, Chris Bowen asking him to look at this issue and to come up with some legislation that makes banks more accountable and responsible. His address is very easy.
Hon Chris Bowen, Here is what I have written; Dear Mr Bowen, I am writing to you because there are many people in Australia struggling with Credit Card debt because banks have been allowed to lend money using somewhat questionable methods. Banks have encouraged and assisted people to get into debt but when these people ask for assistance to get that debt paid off the banks basically turn their backs. Many people have been refused a personal loan to pay out multiple Credit Card debts because they are deemed to be a 'bad risk' because of the amount of debt they have. It is rather ironic that it was the banks who gave these people the Credit Cards that make up the debt but they then won't refinance the debt to a single personal 'consolidation' loan that will allow them to get on top of the repayments. After being refused a consolidation loan as described above, it is common for people to receive letters in the mail inviting them to increase the Limit on their Credit Card. There is definitely something wrong here! In approving someone for additional Credit an institution would have to look at an applicant's total debt serviceability taking into consideration ALL of their debts. To offer them a Credit Limit increase or a new Credit Card the institution MUST have determined that the client was NOT a bad risk. It only goes to follow then that they should be obliged to provide that person with a single loan to repay all of their debts if they request it. So, I believe there is a need for a law that would require the last institution to lend money to someone to have an automatic obligation to provide a personal loan to pay out ALL of that person's debts if they ask for it. This is an urgent matter that needs immediate attention as there are many people right now who have been enticed into huge Credit Card debts who are being told they are a bad risk by the very people who have been happy to give them that debt. I look forward to better and fairer lending practices as a result of your attention to this matter.
Regards |
Hopefully Greg's story will help many people find a
way out of the Credit Card Debt Trap.
