in this video we're gonna talk about how do we pay off your credit card without
making more money
hey what's going on guys this is Sam Kwak from the Kwak Brothers and this
video we're gonna talk about how do we pay off your credit card without making
more money some of you guys may have one credit card two credit card five credit
card or if you're like me I have like 20 gazillion credit cards so we're gonna
talk about how do we pay em off without having to make more money and I know
some of you guys are thinking man I don't know if I'm gonna be able to pay
off my credit card with the the amount of money that I'm making right now I
have way more credit card debt than I can ever pay off using my income so I'm
gonna show you guys a technique and a strategy that I'm actually gonna be
borrowing from my other video how to pay off your mortgage in five to seven years
it's a similar concept but I'm going to modify it slightly for the credit card
version so well we start with and traditionally what you guys are used to
is you guys are used to paying your credit cards that out of your checking
account okay there you go checking account and traditionally you guys been
paying off your credit cards right you might be doing a minimum payment just to
get by okay now I'm gonna tell you guys right now with your minimum payment very
small chunk of that is gonna go actually towards your principal principal is the
actual amount that you charged on the credit card and the interest obviously
is the fee that credit card companies are charging you to be able to borrow
that money so traditionally you guys been doing this right paying your credit
card debt with your checking account doing the minimum payment or maybe you
might you might be doing a little bit more just so that you can go ahead and
pay it off even a little bit faster now the problem with the strategy is if you
leave a balance if your balance carrier meaning you just like to have a couple
thousand dollars sitting your credit card and just pay it off as you go the
problem with that is it's kind of like chasing your own tail like it almost
feels like you're never paying off your credit card
so one thing that gonna show you guys is the concept called average daily balance
I'm gonna show you more of the overview first and that's going walk backwards to
talk about the details and why this strategy works so instead of going
straight to your credit card I'll use red for this one don't do this okay
don't go from checking account right to your credit cards and it introduced
another tool that we're gonna use for this strategy
we're gonna use what's called a line of credit a personal line of credit so
pilaf stands for personal line of credit if you guys see my other video on how to
pay off your mortgage in five to seven years we talked about a HELOC which is a
home equity line of credit so in this particular strategy if we're if all
we're focused on is paying off your credit card it's like you don't even
have a home loan you don't have a mortgage you don't have an auto loan all
you're focused on is credit cards this is a strategy so instead of putting your
money right into the credit cards we're gonna do is gonna take all of our income
all money into your line of credit now a lot of credit works actually very
similar similarly to credit card but what's different about a line of credit
is that you can pull the cash you can pull the money out of the line of credit
without being a charged as cash advance for those don't know what a cash advance
is credit card some certain credit cards have you you have the ability to go to
an ATM machine put your credit card swipe and you can get cash out the
problem with that is the interest rate on those things are really really high
you might be looking at a where between 23 - all the way to 30% APR so trying to
get cash out of your credit card is very very painful right so what we want to
set up is it personal a lot of credit and when you what you do is you take
let's say you have $10,000 balance in your credit card okay some of you guys
may have more so you guys have less and let's say we got qualified for $5,000
personal line of credit okay and what we're gonna do is we're gonna go ahead
and transfer 10th out a five thousand of the credit
card balance over to the line credit remember your line of credit works just
like a credit card that $5,000 limit that you have it's not
an actual like you don't get that upfront okay the $5,000 limit you can
draw this money out with the personal line of credit you can you know take the
money I don't want to credit and you can pay back online credit and use it over
and over again so it really it is a quasi semi credit card again the
difference is taking out taking the cash out of the personal line of credit is
way easier than doing it the credit card so we're going to do is we're going to
take a $5,000 chunk out of the credit card now we have a balance of 5,000 and
we also have about of 5,000 out of the $5,000 limit that we
were given so we didn't we didn't incur more debt right we just transferred with
one debt to another now the reason why we do this is because number one we have
that easy access that we talked about going back and forth checking account
and personal line of credit okay number two the interest rate on the personal
line of credit is significantly lower you're looking at probably half of what
your traditional credit card interest rate looks like so with the personal
line credit you're gonna be anywhere between I've seen as low as seven
percent all the way to 12 percent I know a certain credit cards can get that
cheap but I've really seen it with credit cards you're gonna be anywhere
between 13 - all the way to 26 percent APR so obviously right there right off
the bat you're gonna get a savings on the interest with the personal line
credit but that's not where we're gonna go save our money some of you guys are
thinking okay I see where you're saving money you're just doing a balance
transfer over to a lower interest rate that's how you're saving your money
right well not quite that's kind of half the battle where the secret weapon to
this is we're gonna talk about the concept of average daily balance and
average daily interest and we're gonna how we're gonna manipulate all that so
if you once you transfer over the $5,000 into the personal line of credit okay
now we're gonna still use our credit card to do our spending so we're gonna
pay our groceries okay we're gonna do our gas okay food right and the reason
why we still spend the money out of the food out of the credit card to pay our
food gas and groceries is most credit cards have what's called a grace period
typically and on average 21 days of grace period so let's say you want to
bought food and restaurant the credit cards would give you 21 days of interest
free on that purchase so that's nice right you don't have to pay interest
within that 21 days as long as you pay it off so what you do is typically what
we want to do the overview of this strategy is let's say I do a little
version of a calendar so this is the first day of the month and you got your
31st day of the of the month right I know February we have 28 so bear with me
but what we're gonna do is we're gonna do the complete balance transfer over to
personal line of credit whether you do a small champ chunk or another version of
the strategy is you can take the entire credit card debt you have and just
transfer it over to a personal line of credit as long as you have a limit to do
so so once you do that you take all of your income and you move it over to your
personal line of credit so what you've done is you you've now lured the person
wanted credit balance by the amount of income that you've generated make sense
now what you do in the between between the 1st and the 31st this is where we
get to spend all your money with your credit card okay do your grocery
shopping food you go take care you know take care of family expenses you have
kids diapers are expensive so do that with your credit card remember you got
21 days about 21 days of grace period that you don't have to pay interest
right now at the end of 21 day or towards the end of the month what you're
gonna do is you're gonna go from you're gonna take your personal line of credit
which should have been freed up by the income that you generated okay you have
you should have some room in there right you're gonna take your credit card and
pay off that I'm sorry personal line of credit and pay off your credit card
completely before the 21 days of grace period is over that way you're not being
charged of interest within that 21 days now the reason why we do is do this
thing and I know some of you guys already see why we're saving a lot of
interest this way it's because we're cutting down on what's known as average
daily balance so we're gonna talk about averaging of balance and I'm actually
gonna use black for this one so average daily balance is how the bank's charge
you interest its average daily interest average a balance I should say average
daily interest happens because of average a balance so average daily
interest is the interest are you getting charged for that day according to the
balance of that day so the calculation is you take your interest rate okay
divided by 365 because there's 365 days in a year okay times balance of that day
what does that mean well let's say today I have a thousand dollar balance in my
line of credit okay and tomorrow I charged $200 into my
line of credit so my my thousand dollar balance is gonna have a different
interest next day because I've incurred additional $200 my balance I don't have
a different interest what a nine right so let's say my interest rate is five
percent here divided by three or 65 okay it's gonna be a super small decimal
number times the balance of that day I'd say ten thousand my interest is whatever
that calculation is I don't have a calculator on me right now but whatever
that day but let's say tomorrow we take all of our income okay let's say three
thousand dollars of income and we tackle the balance in the line of credit now we
have seven thousand dollars of balance on our line of credit which means if we
do that same equation okay now we're gonna have significantly less interest
that we're gonna get charged for that day okay
most of you guys who have credit cards you guys are just keeping that $10,000
and waiting and waiting and just get you just keep getting charged every single
day on that ten thousand dollar balance but if you take that three thousand
dollar income that you have put on the line of credit does reducing it down to
seven thousand your interest is significantly lower but you know you can
also you can access that three thousand dollars if you need it again okay I know
some of you guys are like oh my gosh why do we need to put like why should we put
all of our income into the line of credit how do we spend our money right
if we put it all in a line of credit the idea guys here is that if we do this I'm
gonna go back one slide if we do this if we're down to seven thousand versus ten
thousand and we keep it with personal amount of credit balance down at seven
thousand all the way to the 31st guess what the days in between the first and
thirty first we've been charged with a significantly lower interest amount all
while we're spending all our money on the credit cards that has zero interest
for the 21 days you see why you guys are getting significantly less of interest
because we're playing with the idea of average daily balance cool
and so we're taking advantage of two things credit card being that we have 21
days of zero interest being Kurt okay within the purchase the next
thing is that we have our personal amount of credit which we can always
take the income put it in the person line of credit but it's also eat just as
easy to take that money back out and put in your your checking account okay I
know there are some there are some bills that you cannot pay with your credit
cards like a mortgage I know you can't pay your rent out of a credit card I
know some landlords do but it costs extra so lot some of the bills that you
may end up paying may not allow you to pay it out of your credit card which I
get so this is why we want the personal line of credit so that we can go ahead
and pay you know our rent if you have a mortgage payment you got to do that if
you try to do that with your credit card it's not gonna work
sometimes gonna charge you extra fees to do that so that is basically the set up
of the strategy and let's go back to this right here you can see why we're
putting all our money into the personal a credit to lower the average daily
balance and average daily interest adi okay if you do this guys you will you
will chop off the amount of payment Pete a payment time on that credit card by up
to third at a time I've seen people doing within a few months I've seen
people pay off their credit cards in a third at a time as they were scheduled
versus paying like a minimum payment I've seen people pay it off in two
months it's gone in fact I have a lady her name is Ida she was able to she was
able to pay off I think two credit cards in three months which is pretty
incredible and now she's working on our mortgage using this exact same strategy
so guys if you want me to show you a more of an in-depth I guess version of
this video I can go deeper as far as the strategy and you know what even better
I'll give you as a gift I got you guys a gift I'm going to give you guys a
calculator an excel sheet calculator they can go and plug in your numbers so
going you can go and plug in your income you can go and plug in your expenses
plugging your credit card balance plug in how much money you can get out for
personal amount of credit and the calculator will give an estimate of how
fast you can pay off your credit card how much interest you're gonna save and
what what you can do with that extra savings
you're gonna get and I'm gonna also throw in a free ebook to help you
further understand his strategy so guys that link I'm gonna go and throw this
link right here and I'll even leave the link in the link description below in
the video description if you're watching this on YouTube
the link is debt free let's see if I can have enough room accelerator dot-com so
if you go to debt freaks Telecom I'm gonna give you guys a free calculator
and a free ebook what's gonna show you guys how this strategy works even deeper
I know some of you guys may still have questions like what if this what if that
so that ebook is gonna help you answer some questions and also if you guys
really want to figure out if this strategy works for you if you guys want
to see the proof then download the excel sheet calculator plug in your numbers
and see if it actually works for you I'm willing to bet that it does I've really
met people that that this strategy has not transformed that alarm so go to debt
free telecom go get the free calculator in eBook and once you start saving your
money I want you guys to send your pictures to show me that you guys are
paying off your credit cards I want to be able to see you guys succeed so guys
that's a strategy go to def freak seller calm and I'll see you guys there hey
guys it's Daniel and this is Sam we are the fog runners I hope you guys enjoyed
that video if you want to see more content value that we put out like this
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