By Andrew Rosen via Iris.xyz
You can tell a lot about a person by their finances. Usually, I look at ones assets and make some pretty good assumptions about how they save. However, a lot can be learned simply by someone’s credit card debts. It serves as a glimpse into that person’s financial soul.
When I have the opportunity to meet a potential new client and they reveal some outstanding credit card debt, I ask the same two questions every time. I want to know how they accrued this debt and why. By their answers, I’ll know: A) a tremendous amount about them financially (and personally) and B) how to remedy this situation.
Below, I’ll list the 3 most common answers received and the recommended treatment.
Answer 1:
I’ll often hear the credit card debt was the result of a one-time occurrence they couldn’t avoid. This ranges anywhere from needing a new roof to medical expenses they simply had to pay. I sympathize and understand expenses occur that are unexpected and unplanned. Thus, desperate measures result and credit cards are used.
What this tells me:
This individual is, most importantly, not chronic abusers of destructive debt. They had a situation outside of their control. After doing a cost benefit analysis, they determined fixing the leaky roof or seeking medical care was worth accruing some short term credit card debt.
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