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CLOSE Your Credit Cards To Escape DEBT · Earn Your Leisure

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  Speaker 1: Let me ask you this, as far as the people
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  Speaker 1: trying to recover from bad credit, if they're overwhelmed with
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  Speaker 1: credit card debt, what are some options Can they call
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  Speaker 1: to negotiate a settlement? Can they call and negotiate better rate?
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  Speaker 1: Obviously you know bankruptcy, but like if you if you're
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  Speaker 1: just in a situation where you just you can't get
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  Speaker 1: it paid down, what are some options for people?
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  Speaker 2: So when it comes to credit cards, if you just
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  Speaker 2: can't pay it down, well, number one, you have to
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  Speaker 2: make sure that you stop using like the cars, stop
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  Speaker 2: you know, buying things so that you can you can
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  Speaker 2: manage it properly. Number Two, it's so tough right now
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  Speaker 2: because we're at we're in a we're in a we're
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  Speaker 2: in a time where credit card interest rates are the
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  Speaker 2: highest that they've ever been ever. So a lot of
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  Speaker 2: people with credit card debt is just mounting, you know,
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  Speaker 2: it's just growing every single month. So the best thing
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  Speaker 2: you can do at this point, if it's just like
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  Speaker 2: out of your control and you do not foresee yourself
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  Speaker 2: being able to pay that credit card down within the
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  Speaker 2: next ninety days, the best thing to do is honestly
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  Speaker 2: to close that car right now. So that you can
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  Speaker 2: then work on a payment plan. Now, don't close it
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  Speaker 2: and then forget about it and not contact your bank. No,
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  Speaker 2: close it, but have a plan to work out either
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  Speaker 2: a settlement with the bank or an agreement to pay
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  Speaker 2: it back. If you close it and do nothing, then
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  Speaker 2: it'll probably end up a charge off within thirty or
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  Speaker 2: within sixty days. But closing get so that you can
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  Speaker 2: stop the charges temporarily, stop you know, stop the interest
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  Speaker 2: a little bit, and work on paying it back. You can,
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  Speaker 2: I would say, you can, of course, you know, get
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  Speaker 2: another credit card. You can transfer that balance, but most
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  Speaker 2: most likely if you are in credit card that you
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  Speaker 2: probably don't even have the barring power to get another
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  Speaker 2: credit card to transfer the balance to a lower interest
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  Speaker 2: rate card. So yeah, like you can settle with banks.
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  Speaker 2: And now a lot of banks are the end tax
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  Speaker 2: time is coming up. So banks settled tremendously during text time,
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  Speaker 2: like they bank on that time. So now's the time
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  Speaker 2: to try to, you know, come up with a conclusion
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  Speaker 2: on how you're going to settle your balances and you
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  Speaker 2: know rectify like your your habits. But yeah, you can settle,
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  Speaker 2: you can't settle, but you got to know that you
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  Speaker 2: will have to pay it.
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  Speaker 3: I actually went through that as well. Yeah, reached out
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  Speaker 3: to a bank. It was I think at one point
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  Speaker 3: I was late or something. Maybe I think I had
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  Speaker 3: utilized the credit card to the max and I was late,
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  Speaker 3: and they raised the interest rates from like nineteen percent.
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  Speaker 3: This was like my college credit card. It went up
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  Speaker 3: to twenty nine percent. Then it became just ridiculous. I
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  Speaker 3: looked at the payoff date. It was like, it seems
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  Speaker 3: crazy now, but it was twenty thirty five and this
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  Speaker 3: is like the year two thousand. I'm like, house, Yeah,
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  Speaker 3: I'm like, there's no way this is going to happen.
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  Speaker 3: So then I called and they consolidated it down to
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  Speaker 3: a point where I had to pay it off, but
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  Speaker 3: I just had to make sure I paid six consecutive
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  Speaker 3: payments on seven something at the same day.
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  Speaker 2: Usually it's like six to nine months. Yeah.
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  Speaker 3: Yeah, So when it comes to things like that, we're
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  Speaker 3: trying to pay off debt because there's been different strategies,
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  Speaker 3: and I wanted, if you have one right, do I
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  Speaker 3: pay the card that has the highest usage or do
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  Speaker 3: I pay the one that has the least usage. So
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  Speaker 3: I pay that off and then I work my way
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  Speaker 3: like a snowball effect, like what's your what's your thoughts
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  Speaker 3: right now?
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  Speaker 2: So that's a great question. I do like the snow
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  Speaker 2: So if your goal is to just get rid of
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  Speaker 2: your credit card debt and you don't really care to
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  Speaker 2: raise your credit score at this time, if you're not
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  Speaker 2: trying to use your credit, then the snowball effect is
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  Speaker 2: probably the most effect of get the credit card with
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  Speaker 2: the highest interest rate, pay it down, and then work
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  Speaker 2: your way down. Right. However, if you are still trying
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  Speaker 2: to use your credit and want to grow your credit,
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  Speaker 2: why you are paying down your utilization, then I personally
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  Speaker 2: recommend look at any car that has a utilization over
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  Speaker 2: forty eight percent. Tackle those first. If you can get
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  Speaker 2: all of your cards under forty eight percent, then you
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  Speaker 2: don't have what's called the max out penalty on your
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  Speaker 2: credit score, meaning when you apply for credit, it's not
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  Speaker 2: showing that you have a card that's maxed out, right,
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  Speaker 2: people think max out as one hundred percent. After forty
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  Speaker 2: eight percent, banks are looking at you like you have
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  Speaker 2: a maximum card. So get all of your cars over
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  Speaker 2: forty eight percent under forty eight percent, then the next
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  Speaker 2: tier that you should aim for is under thirty percent.
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  Speaker 2: So once you get all the cars under forty five percent,
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  Speaker 2: work to get them under under thirty percent, and then
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  Speaker 2: you just work your way down. If you care about your.
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  Speaker 3: Credit score, what the penalty forty eight is it?
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  Speaker 2: It's cost yeah, all points for sure. So basically depending
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  Speaker 2: on how many cars, any cars that you have over
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  Speaker 2: forty eight percent, and dependent on the score that they're
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  Speaker 2: looking at, I'll say homes, I'll use the mortgage scoring
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  Speaker 2: every card over forty eight percent you're going to you
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  Speaker 2: basically should minus fifteen points per card from from your score.
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  Speaker 2: And also if you are if you have cars that
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  Speaker 2: are on or thirty percent to forty five or thirty
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  Speaker 2: percent to forty seven percent, you pretty much need to map.
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  Speaker 2: You need to subtract about ten points per card, right,
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  Speaker 2: mortgage points. So so yeah, the forty eight percent when
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  Speaker 2: it come credit cards, it's showing that you're maxed out, right,
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  Speaker 2: So get all of your cards under forty eight percent,
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  Speaker 2: then get them under thirty percent, and then you know,
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  Speaker 2: work your way down if you care about your score.
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  Speaker 2: But if you just are concerned with ridding yourself of
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  Speaker 2: credit card that you know, as fast as you can
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  Speaker 2: or cheap the cheapest that you can then. Yeah, the
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  Speaker 2: snowball effect is probably the one that makes the most
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  Speaker 2: sense because the interest does continue to build. Of course
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  Speaker 2: on credit cards.
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  Speaker 1: So it's about business credit. What's the difference between personal
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  Speaker 1: credit and business credit as far as how it's looked
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  Speaker 1: at for your credit score and how you get it
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  Speaker 1: and stuff like that.
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  Speaker 2: Yeah, so most most business credit cards or loans are
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  Speaker 2: not solely based. It's not based on your personal credit score.
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  Speaker 2: It's based on like your business profile score, and so
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  Speaker 2: there is a way to build your business score, but
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  Speaker 2: it is different and separate from like your personal credit score.
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  Speaker 2: What I tell for everyone, make sure because I find
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  Speaker 2: a lot of people, especially in the industry, that will
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  Speaker 2: only care about their business score, but then like just
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  Speaker 2: don't care about their person score, which to me, it's backwards.
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  Speaker 2: If you have a great credit score, personal credit score,
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  Speaker 2: then it also sets you up to have and build
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  Speaker 2: great business credit easier. Like you know, you're not. I
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  Speaker 2: have never had any of those net thirty accounts that
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  Speaker 2: people recommend. I don't. I don't deal with all of that,
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  Speaker 2: but I do have a lot of business credit extended
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  Speaker 2: to me simply by using my personal credit. People always say, like,
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  Speaker 2: you don't want to PG your personal credit. I mean I, personally,
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  Speaker 2: I do not subscribe to that theory. If I have
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  Speaker 2: great personal credit, you absolutely can it can I can
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  Speaker 2: definitely vouch for my business credit with my personal credit
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  Speaker 2: because Number one, lower interest, Like if you are just
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  Speaker 2: going solely off your business credit profile, you're gonna pay
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  Speaker 2: higher interests for pretty much everything. If you PG it,
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  Speaker 2: most of the cards that PG you're it's lower interest
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  Speaker 2: personal guarantee. Yeah, yeah, yeah. And so also building establishing
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  Speaker 2: personal relationships with companies, Like we talked about American Express.
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  Speaker 2: That's the like you can get an America you have
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  Speaker 2: an American Express personal card, Now you can get an
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  Speaker 2: American Express business card. Same goals with Chase, same same
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  Speaker 2: goes with most of the big banks. So yeah, I
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  Speaker 2: personally build business credit on the back of my personal credit.
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  Speaker 2: And that does not mean that they're reporting on my
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  Speaker 2: personal credit profile. It just means that once when I
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  Speaker 2: applied for that account, they looked at my personal credit,
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  Speaker 2: and I have no problem with that because it's good, right.
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  Speaker 3: So I wonder from that aspect, when they look at
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  Speaker 3: your personal profile and your business profile, do inquiries work
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  Speaker 3: the same, Because I know a lot of new businesses
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  Speaker 3: will apply for new credit cards, and so do they
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  Speaker 3: look at the same and are how does that work?
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  Speaker 3: Are they negative? Are they degrogatory if you have a
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  Speaker 3: certain amount of within a year?
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  Speaker 2: So are you referring to like if they do if
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  Speaker 2: you do PG it and they do run your personal
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  Speaker 2: credit and it's for a business account, are you saying
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  Speaker 2: does those I know.
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  Speaker 3: If I apply for like five credit cards, which I
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  Speaker 3: wouldn't but a personal a personal person, right, so ifact
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  Speaker 3: that would look at as too many inquiries within a
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  Speaker 3: certain amount of time. Right, if I have a business
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  Speaker 3: and I'm applying for credit cards, do those inquiries? Does
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  Speaker 3: it is it look at the same? No, it is.
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  Speaker 2: It isn't looked at the same when it comes to
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  Speaker 2: business because most of the times, like the funding requirements
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  Speaker 2: are different. And you know, but however, when it comes
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  Speaker 2: to your personal credit, credit card increase way more than
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  Speaker 2: installment increase. So if you're applying for a car, you
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  Speaker 2: can apply, like if you go to Carl, you know
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  Speaker 2: they'll pull they'll run your credit like twenty times for
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  Speaker 2: most people if you don't come already with your financing,
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  Speaker 2: those are not counted individually. A lot of people freak
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  Speaker 2: out when it happens. But if you are doing if
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  Speaker 2: you're applying for installments loans within a fourteen day timeframe,
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  Speaker 2: there is something that's called deduplication, which all increase of
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  Speaker 2: the same manner will be Basically you're only going to
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  Speaker 2: be affected at the weight of one. You'll see all
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  Speaker 2: of them on your credit profile, but they're not all
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  Speaker 2: individually impacting you. Now, when it comes to credit cards,
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  Speaker 2: they're the worst type of increase because they every single
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  Speaker 2: credit card increy does impact you the same. But I mean,
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  Speaker 2: here's the thing. Increies are only worth up to fifty
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  Speaker 2: five points. So I tell people all the time, people
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  Speaker 2: worry about increase more than they worry about paying history,
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  Speaker 2: credit utilization, and credit age. And it's just like, you
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  Speaker 2: should not be trying to save or protect your credit
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  Speaker 2: increase more than you are building credit, Like because a
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  Speaker 2: lot of people will not build credit because they're scared
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  Speaker 2: of increase. And it's just like, so you're going to
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  Speaker 2: you care more about ten percent of your credit profile
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  Speaker 2: than collectively seventy five percent of your profile. That doesn't
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  Speaker 2: make sense. When you're building credit, you're going to get increased.
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  Speaker 2: I don't. I don't care about increase ever, because if
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  Speaker 2: you have a great credit profile, they will never affect you.
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  Speaker 2: There has never in the history of ever where you were,
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  Speaker 2: was someone denied solely for increase. And people convince themselves
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  Speaker 2: that the increase is what caused the denial, Like, no,
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  Speaker 2: you were denied because you have a LA payment or X,
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  Speaker 2: Y and Z. A bank is not going to deny
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  Speaker 2: you solely because of an increase. If your credit profile
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  Speaker 2: qualifies for the card or account, they would be they
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  Speaker 2: would be crazy. A bank wants you to, you know,
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  Speaker 2: of course, borrow the money from them. And if you
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  Speaker 2: are denied for an inquiry, you can always get a
• 10:03
  Speaker 2: reconsideration