Debt is great, in fact, I don't know what I'd do without it. Debt teaches you to manage your money. Debt builds credit. And if you play your cards right, debt will actually earn money for you. It's all simple. If your credit is bad right now, this may not work. But if you have average or better credit, this will only help to improve it.



After I moved to Colorado I had a ton of debt, so what did I do? Waited tables for 6 months and rang up even more debt by partying all the time, bought a new snowboard and bindings, bought a bed, bought furniture, hell - I bought everything. I took trips. All through college I took trips, I buy all sorts of toys - new computers, digital video cameras, etc. etc. In fact, I'm still in debt right now, but this summer I'm going to buy a new bike and a wide-screen HDTV big screen as well as take a few more trips. Why not? You're only young once, don't put off buying stuff until you can afford it - CHARGE IT CHARGE IT CHARGE IT!

Upon starting my current job at Mines, I had roughly $7000 in credit card debt. I've carried a balance on my credit card since about July of 2000. You must think I'm an idiot for doing this - but let me tell you something - I've never paid even one penny of interest on any credit card in my life. I charge everything. Currently I have roughly 8 credit cards. People say this hurts your credit - I say bullshit. When I went to get approved for credit on my couches I bought last year, the lady said I had the best credit she'd ever seen for someone my age (23 at the time). (update: 5-2-2005.... My credit score is currently 759)

Citibank and Discover Card, this is random internet reader. Random internet reader, meet Discover Card and Citibank. Ok, now that you've been introduced, be nice to these two, they are your new best friends. Citibank rules, they have saved my ass. Discover card sucks but they're gullible idiots that I enjoy taking advantage of. (First USA was cool but they suck now, don't ask). So what I do here.

1) Citibank will automatically approve anyone for a card pretty much. Their cards always have a 0% rate on balance transfers for like 8-12 months with no fee. If there is a fee, just tell them you will not want the card unless they waive the fee. Basically, this means if you transfer stuff from another card, you get it interest free for up to a year. So step 1 - apply for one of these cards with a 0% rate. Wait for the card to arrive.

2) Buy everything I want at one time. If I want a big screen TV and a Bike (combined total of roughly $2500) I will charge it to Discover card. They are morons. They give you "cash back" incentives. So for this purchase they'll give me like $10 or something. I know, big deal, but it's better than nothing. Citibank will automatically approve anyone for a card that gets a 0% balance transfer rate for like 8 months or something like that.

3) The next day, transfer your discover balance over to your Citibank card. This rocks for your credit. Creditors don't see this as a balance transfer, they see it as "wow, he paid off $2500 in one day!" this is outstanding for your credit score. You now have a 0% balance on your discover card and you have your cash back money sitting there waiting for you. Now you have up to 12 months of your Citibank card at 0%. Here's where it gets fun. First off, tell Citibank you don't want paper statements (and you will only use online billing) and you automatically get credited $5. So now we're up $15 on this purchase. Again - big deal - but, better than nothing.

4) Make payments if you want. DO NOT EVER miss a minimum payment. You'll be required to pay Citibank like $30/month or something, NEVER miss a payment. Whenever you have an extra $200 or $300 - give it to them. But don't worry about what your balance is, it doesn't matter.

5) Continue over this 12 months to purchase everything on your discover card, then immediately transfer it to your citi card. This will build up your cash back points with discover. Also, this improves your credit as the creditors don't see your account as your credit record is just read as "he paid it off...no late payments...paid in full within the first month of debt" Rock on.

6) When you're about 2 months from having an expired 0% rate, your goal is to have your debt slashed in half. Now you go to Citibank's website and apply for another card from them with a new 0% rate. Now, here's another cool part. You're not allowed to transfer balances from one citi card to another, so you need an intermediary. So...you have your discover card, your old Citibank card, and the new one that we just got from applying for in this step (step 6).

7) Take your balance from your old Citibank card on which the 0% rate is about to expire, transfer it to discover card. Discover will try to charge you a fee, tell them you will cancel your account if they don't let you transfer this without a fee, they will comply. So now your balance is transferred back to your discover card. Discover gives you double cash back points for all balances transferred to it. So again, next day, call Citibank about your NEW citi card and transfer that discover balance to it - this'll give you another 12 months of 0%.

Does that make sense? It's worked great for me for over 3 years. I've gotten about $25 from citi for stopping paper transactions on all my Citibank cards. I immediately cancel all citi cards when they're 0'ed out (from transferring their balance to discover), so this as well helps your credit by not having unused accounts on your record. Other tips...say you have a balance of $1000 on your discover card. Tell Citibank you want to transfer $1500 to their account from discover. Basically, they send a check to discover card for $1500 - so you have $500 of CREDIT (free money at 0% rate) to charge on your discover card! I do this whenever I need a little cash. Paying interest on anything is for fools.

Just to confuse you even more...here ya go...here's a little outline of how it works

1) Discover balance $1200

2) transfer that balance to Citibank Card 1 at 0% (discover balance = 0 Citibank card 1 balance = 1200)

3) Cancel your mail-paper statements with citicard - gets you $5 (discover balance = 0 Citibank card 1 balance = 1195)

3) Make payments over the year...for example ...say you pay off 600 (discover balance = 0 Citibank card 1 balance = 595)

4) get Citibank card #2 with a 0% rate - cancel your paper statements immediately - credits you $5 (Citibank card 2 balance = -5)

5) transfer Citibank card 1 balance back to discover card (discover card balance = 595 Citibank card 1 balance = 0 Citibank card 2 = -5)

6) cancel Citibank card #1

7) transfer discover balance to Citibank card #2 (discover balance = 0 Citibank card 2 balance = 590)