By Andrew Rosen via

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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