Secrets to Getting Your Clients Out of Credit Card Debt with Dan B

Hey, credit heroes, how would you like the secret to getting your clients out of debt? Well, today you are going to meet Dan Benvenisti. He is a personal finance expert, and today he's going to share with you how to turn the tables on the credit card industry and rescue your clients from their credit card nightmares. So you better stick around. My name is Daniel Rosen, and welcome to Credit Repair Business Secrets. Okay, now, before we get into this, if you would like me to hold you by the hand as you launch your very own credit repair business over just a couple weeks, go to creditherochallenge.com okay, let's get into this amazing interview. Dan Benavanisti is one of my oldest friends. We both grew up in Los Angeles, and he is the smartest guy I know when it comes to personal finances. He created our popular course on how to become a personal finance coach. And now he has created a new course called Credit Card Secrets. And today he is going to give you some amazing insight that's going to help you to attack your client's biggest issue, their credit cards. So please welcome to the podcast, Dan Ben Veniste. Hey, Dan. Welcome to the podcast.

Hi, Daniel. Great to be here. It's exciting to be here.

Exciting to have you. Everyone loves your personal finance coaching course, and I love that you've created this new course. See, I hate credit cards. I think they're evil. And I don't even use them anymore because I got into so much trouble with them in the past. And you knew me when I was dirt poor and when I was drowning in debt as I was trying to build credit repair cloud, remember?

Yeah. You're what you call a good client, a good customer for the credit card industry. Yeah. Credit cards are actually designed for people like that. They're designed to get people to overuse them. They're designed to get people to pay high fees and high interest rates. And that's what so many of our clients or so many clients, you know, have.

Yeah. And it got me so bad, I was addicted to them. And then I got. I was drowning and I was drowning in debt, and I was so depressed. It was just horrible. There were days I couldn't get out of bed, and it was all because of credit card debt. So I want to know, because you've created this course, have you ever had issues with credit cards?

Not me in particular, but certainly family members. And as you probably know, you know, I grew up in a relatively impoverished way, and I had many, many family members that were, you know, struggling with their finances. And the credit card industry kind of really kind of blossomed in the 90s and 2000s. And that's where it started creating all these products that really kind of targeted people that had issues with their credit. And what it does is it creates incentives for people to spend more than they could afford. And that creates more fees and more interest and more profit for the credit card companies. For people like me now, credit cards are actually free. It's a free service that provides rewards points. It's actually cheaper for me to use a credit card than for me not to use a credit card. But for many clients, it's the absolute opposite. And what kind of got me into this subject is when we started the personal finance coaching course, it turned out that most people's, virtually everyone's big issue was credit card debt. And that's not by accident. These credit card companies are targeting this population, and that's where they get their profit. Credit cards are very unique in that in credit cards, the people that have the most trouble with them are actually subsidizing the service for everyone else. And because of that, it keeps people perpetually in debt, perpetually paying interest. And of course, it's not just the interest and the fees. It's that it affects your credit card score. And when it affects your credit card score, you go into this endless loop of bad credit, higher interest rates, never been able to create assets, never been able to crawl yourself out of debt. And that's why to truly help clients, it's not just an issue of repairing their credit, because they could fall right back into that same problem. You need to be able to help them become a personal finance coach. And to help them further, you have to understand how credit cards work and how to take advantages of advantage of credit cards and essentially get them out of that cycle. You know, be able to use good credit credit cards and not the ones that have very high interest. Know how to pay off your credit cards, you know, fastest. Know, know which credit cards to pay off first. Know the tricks that credit card companies do to essentially keep you more in debt and keep the fees and the interest rate, you know, flowing to them.

Absolutely. Just this morning in my mail, I got those checks that the credit card company sends. I always rip them up now, and I'm really happy to rip them up. But I remember years ago, I would get those checks and I go, whoa, magic money. I can make the rent, you know, I can eat, because I was living paycheck to paycheck. And it's just crazy how many different ways they have to suck people into it. It's all by design, isn't it?

Yeah, those checks are hooks, you know, they're to incentivize you to use their card, whatever money they give you. In some cases, if you're savvy enough, it could be quite a reward. You could actually get money for free from credit cards. In most cases, the amount of fees and interest that they charge you will weigh out be worth a lot more to them than, than the incentives or the rewards that they give to you. And that's why it's so important to kind of understand how credit cards work, how the credit card industry makes their money. What are the different types of credit cards? There are many different types of credit cards. You have to have that knowledge in order to help your client get out of debt. It's part of being a good personal finance coach. It's part of being good at repairing people's debt. It's a great service that you could provide to your clients.

Well, you said something and I agree with you 100%. Every credit repair person needs to learn about how to be a personal finance coach and needs to know the root of the problem and how evil the credit card companies are. But you mentioned something that I want to touch, that I want to go back to. How do credit card companies make all their money?

Ah, there's two ways credit card companies make their money. The main way they make their money is when people don't pay their bill on time. So you might feel guilty that you don't pay your bill on time and saying, oh, the poor credit card company, they only, they lent me money and I'm not able to pay them back. That's the wrong feeling. That's exactly what they want you to do. So when you don't pay your full balance, what happens is there's two things. There's of course, a fee that you paying late or whatever have you and then there's interest. And that interest is the majority of the money that the credit card industries make. And that, that that's much larger than any other source of income that they have. So they make their money off of people not being able to pay their credit cards back on time. The other source of income they have are they charged the retail vendor, when you use your credit cards, about a 2% fee. And every time you use your credit card, the person you're buying from, the retailer is paying a small fee. And that fee is essentially added onto the consumer costs. So everything costs a little bit more because people use credit Cards. But the intent is that people buy more, so it kind of pays for itself. But most of that fee is how the credit card companies afford their rewards program. So you know how you get cash back or you get free flights and all that kind of stuff that's paid for by the fee that they charge the retail vendors. So again, this is what makes the credit card industry very unique compared to everything else. The people that are in the most dire situations, the people that are most struggling with their bills, they're the ones that are paying the whole service for. The people who pay their bills on time every month and are quite comfortable. So literally, I mean, not to be overly dramatic, but the poor are subsidizing the rich for the credit card industry. I know that's overly simplistic. Certainly people that have trouble with their credit cards aren't considered the poor. Many of them are just struggling with their finances or just have poor habits or whatever have you. But that's the population that's subsidizing the people that are paying off their bill every month and providing the service to them. Wow.

See, they are evil.

Yeah. So the poor are literally buying airline tickets for the rich. Because when the rich use their credit cards, they get free airline tickets. That airline ticket is paid for by other people who aren't able to pay their bills on time and are paying high interest fees. And that's not a good system, obviously.

Wow. So are they really targeting the financially vulnerable?

Yes, absolutely. That's how they make their money. That's why when you declare bankruptcy, there's a letter in the mail the next day for a new credit card. That's why when you have so many credit problems, you still get credit card letters in the mail because you're their ideal customer. I mean, to be quite frank, people like you and me are not their customer. Not their ideal customers. They don't like us because we pay our bills every month. They're essentially giving us free loans. Every single month they give us a free loan and they don't make anything off of us. And in fact, they have to give us big rewards back. So part of this course is it teaches you how to take advantage of the credit card industry and have all these free services and not get stuck in these perpetual debt interest and fees that so many people are encountering. It's quite tragic for many people.

Yeah, it sure is. So how do you turn the tables on them?

Well, the first thing is not to get in debt. You know, you need to, of course, pay off your bills and that doesn't happen overnight. Right. Because we have, you know, sometimes people have a lot of debt. So you got to determine how best to pay off your credit cards. You know, what are your options? You know, is bankruptcy an option? Is transferring the funds to another credit card an option you have to kind of strategize how to pay off your debt. And that's where a personal finance coach really comes into play. Sometimes you need somebody to kind of look over your finances and come up with a long term plan. Things don't happen overnight. It could take six months, it could take a year, it could take a couple of months. It depends on the situation. Once you get out of debt and you, and you develop skills and a pattern of how to use credit cards properly, these credit cards could be quite, quite nice. You know, you can get free airline tickets, you know, you could get free cash back. But none of that happens when you're in debt. You know, not only do you pay interest on the principal, you know, which is incredibly high, sometimes 18, 20, 25% interest rate, which you don't find in any other situation. You're also paying interest on the interest. So it's what's referred to as compounding interest. And that is incredibly hard to get out of.

Wow. Well, so what are some of the ways that you can coach coach clients to reduce their credit card debt?

Well, the first thing to have is visibility. Most people don't know what, how much credit cards they owe, which credit cards have the highest interest, what's your minimum payment. So you need to have a strategy. So one thing I go over in personal finance coaching is giving visibility. And when you have visibility, often the answer is obvious and then you create a plan on how to pay it down. And there's different ways to pay it down. You know, credit card interest is some of your highest interest that you're going to pay. You know, home equity is one of your lowest interest you could pay. So if you have the discipline, it might make sense to pay off your credit cards using home equity. There's other techniques you want to pay off your highest interest rate card first because that of course has the highest penalty, the highest payments. You know, there's other techniques. You know, sometimes in some cases bankruptcy might be the right answer. It rarely is, most cases not. But in some cases it is. Ideally what you want to do is avoid patterns that get you into this problem to begin with. Recognize that the things that you buy now you're going to have to pay for and how best to kind of make that payments to where you could pay it off in a reasonable amount of time without getting yourself into perpetual problems. You know that old saying, when you're in a hole, the first thing you want to do is not dig deeper. You want to figure out how to get out of the hole first.

Gotcha. So what are the ways that you can coach a client who's an impulsive spender?

That was me. Well, again, what you want to do is you want to show visibility, and that's where a personal finance coach helps out. Because when you're spending on your own, that's one thing. But when you're looking at easy to read report, showing what you've spent and understanding that no, you can't afford this amount of money, this is getting you in more debt. And the answer becomes obvious. And you want to have a plan. You want to have a budget for the month. You want to have track your spending. You want to be able to be prepared in case there's unforeseen costs that you're going to have to, to pay. You want to give yourself margin. And to be quite frank, you got to have personal discipline. Without personal discipline, a lot of this is never going to happen. But I don't want to blame it fully on personal discipline because the credit card is designed and specifically targeted to make you spend more than you could afford. So it's not solely a person's, you know, I guess, character. A lot of it is kind of understanding the tricks that the credit card industry, you know, imposes on us and developing a plan to kind of combat them.

Amazing. How do credit cards affect your credit score?

Oh, dramatically. So as most people who run credit repair businesses and they pull reports, you're going to see the biggest issue are credit card debt. If you hold, if you have a credit, if you have a credit line with your credit and you have, I think it's what, 70 or 60% of your credit line that will affect your credit score. Even if you pay off your debt, even if you pay off the balance every month or you're making the minimum payments, it'll still lower your credit score. If you close a credit card, if you actually say, no, I don't want this credit card, I paid it off, I don't need it, that negatively affects your credit score. That's insane. Why would I, would closing a credit card lower your credit score? But it does. Of course, if you're not able to pay your interest, that, that affects your credit score in a negative way and it charges you, it causes you to have higher Interest, which again, makes it harder for you to make your payment. If you paid late, that affects your credit card score. You. I don't see, like, for the majority of clients, I don't see a way you could repair their credit unless you address the elephant in the room, which is their credit cards.

Absolutely. And you know what a common question we get all the time is, if you fix a client's credit score with credit repair cloud and you remove the negative items, will that solve their credit card problem?

Yeah, I think we both know because. And actually, most of your clients know as well. No, they. Because it's the same person. Right. The same techniques that got them into their problem haven't been removed. So I kind of view credit repair as somewhat of a band aid. Right. It's needed. You're bleeding, you need to do to be. You need to get first aid and to get repaired. But if you want it to be financially stable and prosper and build assets and all these great things that we want for everybody, you have to have better. You have to be more financially savvy. You have to know how various financial systems work. You have to know how credit cards work. You have to know how potentially the process of buying a house, financing a car, how you can afford education. All of these things are needed in order to stay out, to improve your credit permanently and be on a path to building assets. So, no, solving someone's credit is a temporary fix, and you need to develop skills to truly change their lives.

Absolutely. And additionally, if you remove a negative item off a credit report, that's like a credit card bill that was never paid, it doesn't erase the debt, and you can still be sued for that. And a lot of people don't realize that even though it's not on the report anymore.

Yeah, that's actually a very good point. The credit score is a score. It's not the debt. So even if we successfully remove an unpaid credit card bill, you are still liable for that money. That's a very good point you made.

Absolutely. What are your thoughts on credit consolidation for people who are way overextended?

So credit card interest varies dramatically. Some, like, if you look at my credit card interest, which I don't need because I pay it off, everybody, it's very low. It's like, I don't know, 10, 15%. I don't even care because I paid off. But for other people, it could be 18, it could be 25, it could be, you know, these crazy high numbers. So in many cases, it makes sense to consolidate your debt to the lowest interest rate possible and that will allow you to pay it off faster. The faster you pay it off, the smaller amount of time you're exposed to that debt. So I'm quite a proponent of consolidation. But be careful because there are many, and I be quite frank, there are many scams out there that put you in at a lower, low rate at the beginning and then it jumps up to a very high rate and then you're in a worse situation. So again, you need to be financially savvy and understand the system and understand where the opportunities are.

Wow. So how does personal finance coaching complement someone who has a credit repair business?

So it provides another service. I mean first off, so first you can repair their credit, but you know, that may come back next year or whatever have you. And once you repair their credit, maybe they don't need your services. Personal finance coaching is more long term. Right. You're dealing with a client for a long period of time so you could offer them more services. You have a better ability to improve your client's financial stability. Repairing their credit may not do that. It may get them a lower interest loan in the short term, but over a year or two, they might be right back to where they started. You have a better opportunity to truly change their lives. And also you're adding value. Right. It's another opportunity to add value to your clients. Your clients will see you in a better light. You could offer more. I hate to use the word service too many times, but what personal finance coaching does is it gets you a better relationship with your client to truly understand their problems. And with that then you could help them out more.

Awesome. So first you created the personal finance coaching course. So can you tell everybody a little bit about that course?

Yeah, that's a great thing. So it started when I noticed that repairing someone's credit did not fully address all their problems. Right. They essentially have that same skill set they had before and they go right back into the same pitfalls. So what personal finance coaching is, is it allows you to work with your clients, see all your clients finances, so you could see where their spending habits are, where, how much they're savings, you know, where they're, they're, you know, which, which credit cards have the highest interest rates. And it allows you to have a frank conversation with your clients and explain, you know, this is the problem, you know, right here is the issue. We need to have a plan, a long term plan to help them. And if, if you know, and I know you are, if you really want to Help clients, you have to provide them with more skills. The more skills and the more financial skills they have, the better their lives are going to be. The better opportunities they're going to have to build assets, to buy their first home, to not get ripped off when they buy a car, to be able to manage credit cards to where it benefits them and gives them free flights. And not like perpetual debt. All that comes from personal finance coaching.

I love the way that you've worked in all these free tools that people can use to monitor their clients accounts and all that sort of stuff. You've made it really, really easy. People do love that course. And now I'm so excited about this new course that just launched today, the Credit Card Secrets course. Tell us about that one.

When you look, when you do personal finance coaching, you notice that there's a pattern. Most people have the exact same problem and that's too much credit card debt. And credit cards are complicated. So if you want to help people with their credit card debt, you have to understand the credit card industry. And I go over that at a high level in the personal finance coaching course. And I go over it in a lot more detail in the Credit Card Secrets course. And when you master the credit card secrets and you master the credit card industry, that's when you could provide additional services and additional help to your clients. And it's noticeable because when people don't have credit card debt, they're just in a much better place. I mean, you know, from your own personal experience, when you had credit card debt, it was probably quite hellish.

It was terrible.

Yeah. And when you don't have the debt, it feels quite good. So personal finance coaching resolves that. You know, it addresses that issue. You know, fixing somebody's credit allows you to get loans at lower interest, which is incredibly valuable. Right. Who wants to spend high interest loans? That's a very valuable service, but it doesn't address, you know, your debt and your asset, your ability to accumulate assets and your ability to one day own a home. All of that is not addressed solely by repairing somebody's credit. It's a needed step. But personal finance coaching is a very valuable tool to get to that end.

Absolutely. And if you're running a credit repair business, you need continuing education. Knowledge is power. So everyone should take these courses. I think they are amazing. They're affordable, they cost less than you would probably spend taking your family to McDonald's for dinner. And they're going to make your business so much better.

I continually push that. This course gives you an avenue to understanding personal finance at a much higher level, but is by no means the end. You have to constantly be learning. And we created a Facebook group community where people could share ideas and they could say, hey, I have this question. I had this one client with this one particular problem. What do you guys think that you're continuously learning? And that's what's so important, Continuously learning. All of us have to do that.

It's very, very cool. Thank you so much for being here today, Dan. I really appreciate you. This was awesome. And you guys out there. If you want to learn more about Dan's courses on how to become a personal finance coach and his new course, Credit Card Secrets, just go to credit repair cloud.com/training. And I'm also going to put the link to both courses to go directly. I'm going to put the link to both courses down in the description of this podcast or in the YouTube description if you're listening on YouTube. Both these courses are awesome. And if you're running a credit repair business, they will help you a ton with your clients. So again, go to credit repair cloud.com credit rep training to learn more about them. And if you're finding value in this podcast, click below to subscribe. And if you have any questions, drop a comment down there. I read each and every one of them and I would love to hear from you. Thank you again for being here, Dan.

It was my honor. Thank you so much, Daniel.

It was my honor and everyone out there. I will see you on next week's podcast. And in the meantime, be a credit hero and keep changing lives. Hey everybody, it's Daniel again, and really quick. I'd like to invite you to join what I believe is the best thing we have ever created inside the credit repair cloud community. And it is a challenge that we call the Credit Hero Challenge. If you're just planning out your business or you're just getting it started and you dream of having a successful business of your own so you can quit your 9 to 5 and find your boss and have financial freedom or so you can add another revenue stream to your existing business. If that's your dream, you need to get into this challenge. We created this challenge to help you to create and launch your very own credit repair business to build a proper foundation for a really successful business. This challenge is going to help you to understand the strategy, the tactics and all the things you need to be successful at Credit Repair. It really is the greatest thing we have ever built and it will change your life. So I recommend you do it right now. Stop everything. Pause this audio, go online, and go to creditherochallenge.com that's creditherochallenge.com and join the next challenge. And there's a challenge that's starting in just a few days. So go get started right now@creditherochallenge.com.