You can show me how to cut my debts in half? Really? I know it sounds a bit fanciful,

but let me share a story: I was at our bank depositing some foreign currency checks.

The teller was a guy in his 20s and he had served me several times. After some small

talk he worked up the courage to ask about our company, Wealth Solutions. I told

him we helped people get their financial lives in order. To which he replied: “Well,

then can I ask you a question?” Mindful of being in a bank I replied quietly: “Go

ahead, shoot.”

He told me about a laptop he had purchased from a major electronic retailer about a

year ago. He said that despite the fact that he had dutifully made all the required

payments on time each month, his balance was still the same. It had gone down only

fractionally after a year of payments. “What am I doing wrong?” he pleaded.

I asked him whether he used the retailer’s credit card for the purchase and he told

me that he did. “It was ‘free’ and I only have to pay $25 every month” he said. Did he

know what interest rate he was paying? “No” came the reply. “The problem is that

all you’re paying every month is the interest on the loan they gave you. At your

present rate you’ll still be paying for this laptop long after you’ve abandoned it for a

newer model [10 years].”

“Well, what do I do?” he asked hopefully. I said, “You work in a bank. Surely you

qualify for a low interest credit card from your employer.” “Maybe” he replied.

“Trust me, just do it. Then transfer the debt from the retailer to your new card, and

instead of paying the minimum each month, try paying an extra $25 or more.”

A couple of weeks later he reported that he had been approved for a low rate card

with an introductory rate of 0.99%. After 6 months it resets to 11.99%. By

transferring his debt to the new card and increasing his payments from $25 to $50

per month, his $1,000 laptop would be paid off in less than 2 years. If he increased

his payment to $75/month it would be paid off in a little over a year. It’s not rocket

science, just math.