How to Pay Off ALL of Your Maxed Out Credit Cards with NO CASHFLOW!!!

Summary

This video script offers a debt repayment strategy for individuals struggling with maxed-out credit cards. It introduces the concept of 'velocity banking' to pay off debts faster than making minimum monthly payments. The speaker provides a detailed example of a person with a $20,000 credit card balance and a tight budget, demonstrating how to allocate funds effectively to reduce the balance significantly within months. The script also addresses potential challenges, such as credit limit reductions, and emphasizes the importance of discipline and communication with credit card issuers for successful debt management.

Takeaways

• 📈 The video discusses a method to pay off maxed out credit cards using 'velocity banking', which involves using available cash to reduce the balance before the statement date.
• 💳 It emphasizes the importance of paying the minimum monthly payment on time to avoid penalties and maintain a good credit score.
• 🔢 The script illustrates the long-term financial burden of only making minimum payments on credit card debt, highlighting the high cost of interest over time.
• 🚫 The presenter advises against using credit cards for expenses that cannot be paid off within the same month to avoid increasing the balance.
• 🏠 The example provided involves a person with a $66,000 monthly income and $6,000 in fixed expenses, including rent and other credit card payments.
• 💡 The strategy suggests using the remaining funds after fixed expenses to pay down the balance of the credit card with the highest interest or minimum payment.
• 🌐 The video mentions the potential for credit card issuers to lower credit limits, which could disrupt the debt repayment plan, and suggests proactive communication with them.
• 🔄 After paying off one credit card, the money previously allocated to it should be redirected to the next card in line, accelerating the debt repayment process.
• 📉 The script warns of the risks involved in the velocity banking method, such as the possibility of credit limits being reduced by the issuer.
• 📈 The method can be applied to multiple credit cards, with the goal of systematically reducing debt and improving one's financial situation.
• 👍 The presenter encourages viewers to stay disciplined with their spending and to use the method as a tool for financial recovery, comparing it to a GPS rerouting system.

Q & A

What is the main topic of the video script?

The main topic of the video script is about using velocity banking to pay off maxed out credit cards and managing multiple credit card debts effectively.

What is velocity banking as mentioned in the script?

Velocity banking, as discussed in the script, is a method to pay off credit card debts by using the available funds to make payments towards the credit card balance, aiming to reduce the debt faster than just making minimum monthly payments.

Why is it important to pay off credit card debts as soon as possible according to the video?

It is important to pay off credit card debts as soon as possible because making only minimum monthly payments can lead to a very long repayment period and a significant amount of interest paid over time, as illustrated with the $10,000 balance example taking 29 years to pay off.

What is the potential risk mentioned in the script when using velocity banking to pay off credit card debts?

The potential risk mentioned in the script is that the credit card issuer might lower the credit limit based on the user's history, which could disrupt the velocity banking process.

How does the video suggest mitigating the risk of credit limit reduction by the issuer?

The video suggests calling the credit card issuer and informing them about the plan to pay down the debt in chunks, maintaining a good relationship and demonstrating financial responsibility.

What is the strategy for managing multiple credit cards with varying balances and payments as described in the script?

The strategy involves focusing on one credit card at a time, making payments to reduce its balance, and then moving on to the next card, applying the same principle while also adding the amount previously dedicated to the first card to the next card's payment.

What is the significance of paying down the credit card balance before the statement date?

Paying down the credit card balance before the statement date helps to lower the reported credit utilization to the credit bureaus, which can positively affect the credit score.

How does the script suggest using the freed-up funds after paying off the first credit card?

The script suggests not increasing the lifestyle or changing spending habits but instead taking the funds that were applied to the first card and applying them to the next card, thereby accelerating the debt reduction process.

What is the potential outcome of using the velocity banking method as described in the script?

The potential outcome is a significant reduction in the time it takes to pay off credit card debts compared to making only minimum monthly payments, as well as an improvement in the credit score due to lower credit utilization.

What additional advice does the video provide for those who might face unexpected expenses while using the velocity banking method?

The video advises to continue using the credit card for unexpected expenses, knowing that the funds are available, and to stay disciplined and get back on track with the velocity banking process as soon as possible.

What resource does the video recommend for those who have credit issues such as late payments or collection accounts?

The video recommends checking out 'Beast diy.com', a DIY credit repair platform offering advanced and comprehensive ways to address credit repair on one's own terms.

Outlines

00:00

💳 Addressing Credit Card Debt with Velocity Banking

This paragraph introduces a method known as velocity banking, aimed at individuals struggling with maxed-out credit cards. The speaker acknowledges a previous video on the same topic that has gained significant traction and addresses viewer questions about managing multiple credit cards. The scenario presented involves an individual with a $66,000 monthly income and $6,000 in expenses, leaving no disposable income. The individual has multiple maxed-out credit cards, including one with a $20,000 balance and an $800 minimum monthly payment. The paragraph emphasizes the importance of paying more than the minimum to reduce debt faster and provides startling statistics on the long-term cost of only making minimum payments.

05:01

🔢 Step-by-Step Guide to Velocity Banking for Debt Reduction

The speaker provides a detailed explanation of how to apply velocity banking to pay off multiple maxed-out credit cards. They illustrate the process with a hypothetical person with fixed expenses and a specific credit card balance. The strategy involves using all available funds to pay down the balance of one credit card each month, just before the statement closing date, to minimize the impact on the credit score. The paragraph explains how this method can create a positive cycle of debt reduction and improved credit, emphasizing the importance of discipline and consistency in applying this strategy.

10:03

🚀 Accelerating Debt Repayment with Additional Income

Building on the velocity banking method, the speaker suggests leveraging additional income sources, such as side hustles, to accelerate debt repayment. They highlight the importance of maintaining good communication with credit card issuers to mitigate the risk of credit limit reductions. The paragraph also addresses potential life disruptions and encourages viewers to stay the course even when faced with unexpected expenses. The speaker provides a visual representation of the debt reduction process over time, emphasizing the exponential improvement in financial health as the strategy is consistently applied.

Keywords

💡Credit Cards

Credit cards are a financial tool that allows cardholders to borrow money to pay for goods and services up to a certain limit. In the video's context, they are a source of significant debt for the individuals being discussed, with many cards being 'maxed out' or near their borrowing limits. The script mentions strategies for paying off these debts, emphasizing the importance of managing credit card balances to improve financial health.

💡Maxed Out

To be 'maxed out' refers to a situation where a credit card or other line of credit has been used to its full limit. In the video, individuals are struggling with multiple credit cards that are maxed out, which presents a significant financial challenge and is a key focus of the debt repayment strategy being discussed.

💡Velocity Banking

Velocity Banking is a method mentioned in the video for paying off credit card debts without having immediate cash available. It involves using the credit card's available balance to make payments towards the debt, effectively increasing the velocity at which funds are used to reduce the balance. The video provides a tutorial on how to apply this method to multiple credit cards.

💡Minimum Monthly Payments

Minimum monthly payments are the smallest amount that a borrower is required to pay each month towards their debt. The video script explains that only making minimum payments can lead to a long and expensive debt repayment process, as it often covers mostly interest rather than reducing the principal amount.

💡Debt Repayment

Debt repayment is the process of paying back the money that one owes, typically with interest. The video's main theme revolves around strategies for effective debt repayment, specifically for credit card debt. It emphasizes the importance of not just making minimum payments and taking proactive steps to reduce balances more quickly.

💡Cash Flow

Cash flow refers to the movement of money into and out of a business or individual's finances over a period of time. In the video, the term is used to describe the lack of available funds after necessary expenses have been paid, which is a common issue for those with high credit card debt.

💡Interest Rates

Interest rates are the percentage at which borrowing costs accrue over time. While the video chooses not to focus on varying interest rates for simplicity, it does mention that interest can significantly increase the time and cost of paying off debt, highlighting the urgency of reducing credit card balances.

💡Credit Score

A credit score is a numerical representation of an individual's creditworthiness, which can affect their ability to borrow money or secure a loan. The video script discusses how paying down credit card debt can improve one's credit score, as lower balances and responsible payment habits are positive factors.

💡Credit Limit

A credit limit is the maximum amount of money that a financial institution will lend to a borrower. The video warns of the risk of credit card issuers lowering credit limits, which could disrupt the debt repayment strategy, and suggests proactive communication with the issuer to mitigate this risk.

💡Discipline

Discipline in the context of the video refers to the consistent application of a debt repayment strategy over time, despite potential obstacles or temptations to deviate from the plan. It is portrayed as a key factor in successfully reducing and eliminating debt.

💡DIY Credit Repair

DIY Credit Repair refers to the process of individuals taking steps themselves to improve their credit scores, rather than relying on professional services. The video mentions a platform that offers tools for self-guided credit repair, suggesting it as a resource for those looking to address credit issues beyond just debt repayment.

Highlights

The video addresses individuals struggling with maxed out credit cards and tight monthly budgets.

Introduces the concept of 'velocity banking' to pay off maxed out credit cards without additional cash.

The video has received significant viewership, with over 165,000 views, indicating its relevance to many.

Provides a detailed example of a person with $66,000 monthly income and $6,000 expenses to illustrate the method.

Demonstrates how to manage a $20,000 credit card balance with an $800 minimum monthly payment.

Discusses the long-term financial burden of only making minimum payments on credit card debt.

Presents statistics showing that it could take over 29 years to pay off a $10,000 balance with minimum payments.

Advises viewers to develop a financial plan and exercise discipline in managing debt.

Suggests finding side hustles to earn extra money to accelerate debt repayment.

Explains the importance of paying off credit card balances before the statement date to optimize credit score impact.

Outlines a step-by-step strategy for allocating monthly income to credit card payments and expenses.

Warns of the risk of credit card issuers lowering credit limits, which could disrupt the repayment plan.

Recommends proactive communication with credit card issuers to maintain a good payment relationship.

Illustrates the potential for a significant drop in credit card balance over time with disciplined repayment.

Advises maintaining lifestyle and spending habits even after paying off one credit card to continue the repayment momentum.

Encourages viewers to apply the same principle to other credit cards once the first one is paid off, using the accumulated repayment amount.

Endorses a DIY credit repair platform, offering a cost-effective alternative to full-service credit repair.

Transcripts

if you got a bunch of credit cards that

are maxed out or near maxed out and

you're scraping by every month and you

have no idea where you're going to get

the money to start knocking down these

debts this video is for

you a few weeks ago I released a video

on velocity banking teaching you how to

pay off your maxed out credit cards when

you had no cash follow up over each

month after expenses now to this date

that video has over 165,000 views so I

want to thank you guys for your support

now while there were over 350 comments

on that video a lot of the comments were

asking me questions about how to pay off

multiple credit cards using the same

system what don't worry as usual I got

you come on now when attempting to use

velocity banking to pay off multiple

maxed out credit cards instead of just

one all you need to do is make sure the

math is mathing the splits work almost

exactly the same way but for the

purposes of teaching you guys and

creating a visual for those of you who

can't just imagine it I'm going to go

ahead and run through a very similar

scenario to the one I ran through in the

other video so let's go now the model

we're going to use today is a person who

has $66,000 a monthly income but also

has exactly $6,000 of expenses every

single month leaving them completely

maxed out with absolutely no money left

over and cash flow after all bills have

been paid now to make this as realistic

a scenario as possible we're going to

use a person who has a rent SL morgage

as well as multiple credit cards that

are all maxed out with varying limits

now the initial credit card that we're

going to attack is going to have a

$20,000 balance with an $800 monthly

payment due every month this $800 that's

due every month will only represent the

minimum monthly payment which as you can

see is typically only 4% of the overall

balance or interest plus 1% of the

overall balance either way paying this

800 bucks a month ain't going to be

doing much so how do we knock that

balance down faster well before we get

into that let me show you guys a few

stats now the two examples I have right

here is something that people don't take

into account almost ever and that is

exactly how long it might take to pay

off debt with only making the minimum

monthly payments every month now I did a

little bit of research to see exactly

what these numbers look like and even I

was astonished on a $10,000 balance with

just an 18% interest which is pretty low

for a credit card that's acre interest

it can cost you over $166,000 in

interest and take almost $ 350 months

just to pay this thing off with making

minimum monthly payments only let me

make it plain just in case you didn't do

the math just making minimum monthly

payments on a $10,000 balance will take

you 29 years to pay that bad boy off now

if we drop that $10,000 debt down to

$2,000 and we just add a couple of

points of interest you can see it can

take more than 11 years to pay it off so

it's hyper important for you to as soon

as possible get a plan of action in

place and start to exercise some

discipline in your financial life let's

get to it so we've already reviewed

credit card number one let's take a look

at the other three cards that we're

going to be dealing with here now based

on some of the comments that were left

in that last video some of you guys are

dealing with real life scenarios like

this where you have varying balances

with varing monthly payments and also

varying interest rates but for the sake

of this video I'm going to stay away

from dealing with interest rates

altogether and just let you know that if

you want to knock this thing down a

little bit faster it get you a little

side hustle do some Uber Uber Eats

instacart Craigs List for some odd jobs

you can do pretty much anything to earn

a couple of $100 extra a month to help

start knocking this thing down quicker

so we're going to stay away from the

interest topic now the person we're

going to be talking about today makes

about $6,000 a month after all

deductions the money's been deposited in

their bank account and it's ready to

spend now in this case I'm going to use

a majority example because most people

in America cannot pay their rent their

mortgage or other credit cards using

credit cards I realize some exemptions

but we're not going to go with the

exceptions we're going to go with the

rule now our rent payment in this mod is

going to be $2,000 a month and our other

credit cards minimum monthly payments

are going to be about 1,200 bucks a

month this leaves us with about 2,800

bucks a month to cover all of our other

expenses gas fast food restaurants

groceries cell phone bill cable bill

other utilities things of that nature

pretty much anything else that you can

use a credit card to cover you want to

leave in this account now once we

factored in all of those expenses that

we've calculated before we ever started

this process that leaves us with $0 cash

flow at the end of the month we have no

money and just so we can keep the

information at the top of Mind

throughout this process we're going to

go ahead and put the credit card

information that we're attacking at the

bottom here so let's start off at month

number one where we have a $220,000

balance on a maxed out $20,000 credit

limit you're going to take every single

dime that you have left from your

paycheck after you paid all of the other

expenses that cannot be paid using a

credit card you're going to take that

and put it into this credit card now I

know a lot of you are not going to be

hyper comfortable putting every single

dime that you have into this credit card

but for this particular particular

example to cut this down as fast as

possible we're going to do it like this

my advice to you is to do as much as you

can possibly stomach now once we've use

all that money to pay down that credit

card we're going to be left with a

balance of

$17,200 the key thing here is to pay

attention to when you pay that credit

card now I've released as many videos as

a credit Guru can possibly release

teaching you when to pay your credit

card properly to affect your credit

score so I'll leave it to you to go

check out those on my channel but all

I'm going to say here is make sure you

pay it down a couple of days before the

statement date and try not to do any

spending before that reporting data or

that credit card to the credit bureaus I

realized this will be difficult but try

to keep the spending to a minimum now if

you start to make a habit out of this

what will happen as you start to get

that balance lower and lower as you will

start to see it affect your credit score

immensely one of the main goals here is

to start to build the right habits that

will help you carry this forward as

those balances drop your credit gets

better and your score continues to scy

Rocket now if you do it this way you're

going to hide all of the expenditures

that are going to come throughout the

month from the credit bureaus keeping

that credit score as high as it could

possibly be now throughout the month

we're going to realize about $2,000 in

expenses these are things that cannot be

avoided they cannot change they do not

go anywhere these are your monthly bills

that are static so we know for an

absolute fact that we're going to be

charging at least this amount of money

to this card every single month now I

know at this point you're probably a

little bit confused because I told you

in the beginning that we had 2,800 bucks

of expenses every single month what we

do but what you're not taking into

account is that once you move this money

from here to here every single month you

actually satisfy this monthly payment

without making it a separate bill thus

eliminating this is a bill all together

this essentially goes away now like I

told you in the other video before this

will create about $800 of cash flow

every single month now every single

month that you continue to do this and

move this $2,800 over from your bank to

the credit card you will realize an $800

drop in the balance every single month

as long as you continue to stay

disciplined which in month number one

will bring us down to $19,200 at the end

of the month now I told you that we're

not going to address the interest rates

for these cards in this video but just

for your edification every single month

that you keep this $20,000 balance

they're trying to add $500 of Interest

onto that because in month number two

the interest that they're going to add

to that 192 is going to be a little bit

less than it was for that $20,000 so it

behooves you to knock it down as fast as

possible now let's take a look at month

number two where we have a beginning

balance of $199,200 we're going to do

the exact same thing as we did in month

number one we're going to take out all

of the money to cover the things that we

cannot use a credit card to pay for once

again rent mortgage car note other

credit cards and once we get rid of all

of that once again we'll be left over

with our $2,800 for our monthly expenses

now right before the statement day we're

going to make sure that we go ahead and

drop all this money into this credit

card once again doing our best to make

sure that the credit bureau see the

lowest number possible for our

utilization making our credit score do

what go up now because by depositing

this whole $2,800 we automatically

satisfy this $800 minimum monthly

payment we only have $2,000 of monthly

expenses left to pay for throughout the

month leaving us with an ending balance

of $188,400 the progress should be

exciting at this point now if you can

stay disciplined and continue to do this

month after month after month after

month after month at month s you can see

we're already down to

$14,400 on this balance remember the

information I told you earlier on that

$10,000 balance with just a monthly

minimum minimum payments being made 29

years to pay it off I think it's clear

at this point we're going to get this

done a lot quicker than that now unlike

in the other video where I told you to

pay attention to that balance dropping

because once you get to a certain point

you're going to want to go look for an

interest free 12 18 or even 24 month

balance transfer credit card well this

particular case you have three other

maxed out credit cards so the

possibilities if you finding an interest

free transfer credit card willing to

offer you a significant amount of money

are Slim So at this particular point in

time we're not going to do that portion

of it we're going to stay diligent and

pay down the bills with the money that

we have I want you to take a look at our

balance at month 7 now we started off

with a $20,000 maxed out credit card

which means at this point we have about

$5,600 of available credit now we all

know what happens when you're making a

concerted effort to get something done

and you're being really diligent about

the process life is going to throw

something at you it's going to throw a

wrench in the process you're going to

get a flat tire brakes are going to go

out water heater is going to bust the

kids are going to have a big project or

some kind of school trip but what I want

to encourage you to do is to continue to

use this credit card for whatever reason

if anything pops up know that the money

in the credit card is there as long as

you have this process in your brain you

can always return to it kind of like a

GPS rerouting system if you get off

track all you got to do is continue to

pay attention and at some point you'll

get back on course now I want to take

the opportunity right now to address

something that's really scary with this

process that I did not address in the

last video and that is the possibility

that the credit card issuer based upon

your history with them could lower your

credit limit after you've put all of

your money into that card this is an

obvious risk that can scare a lot of

people away from this process and it's

understandable but there's a couple of

things that you can do at the beginning

of this process to help mitigate this

issue when you know that you're going to

start paying down these credit cards

like this the first thing that you need

to do is call your credit card issuer

let them know that hey life got off

track for a little bit and I was

struggling financially but I contined to

make my payments to you guys and now I'm

at a point where I can start knocking

this thing down in chunks let them know

that they can look forward to payments

of a certain amount each month and that

you'll continue to use the credit card

and hope to maintain a good healthy

relationship with them now this doesn't

guarantee that they won't lower your

credit limit but I can tell you right

now that thousands of people have used

this system over time to help knock out

massive debts quickly and efficiently

but y'all know me I got to give you all

the facts I got to give you all the

options I got to give you all the

information I'll let you do with it what

you will back to the video now I know

this slide is a little bit Overkill but

I wanted you to be able to realize and

visualize what it looks like month after

month after month as you continue to

knock these balances down as you can see

on my example with no interest being

calculated of course you knock this out

at month 25 $0 left on this card now if

you add in the interest even if you

double the amount of time and put it to

50 months you're still way below that

350 months that we looked at in the

beginning of the video now the question

becomes what are you going to do at this

point what is the next step in the

process when you have three other maxed

out credit cards maybe it's not as

obvious as you think you see once you're

done paying off card number one no

matter which card it is that you choose

to make card number one you're not going

to increase your lifestyle you're not

going to change your spending habits the

very next thing you're going to do is

take all of that money that you were

applying to card number one and then

choose your next card to attack wisely

and simply apply this principle all over

again but this time you're going to be

adding the amount of money that you are

already dedicating to card number one to

card number two this will help you

exponentially po Al decrease the amount

of time that it takes to knock that

card's balance all the way out and then

you'll replicate that for card number

three and card number four five six and

seven if you need to the system doesn't

stop or change it just gets

exponentially better and depending on

exactly which way you choose to do it

from the very beginning this method can

be called the snowball or the Avalanche

method using velocity banking this is

not something that's new I did not

invent it other channels that produce it

on YouTube did not invent it this method

of paying down debt has been around for

decades but the information for you to

be able to do it has not so if you like

this kind of content from me and want to

see more of it I want to go ahead and

like the video subscribe to my channel

and make sure you turn on your

notifications this way you'll be

notified of anytime I drop a new video

and last but not least I know a lot of

people that are in this situation have

credit issues maybe you have late

payments collection accounts other

negatives that might be pling your

credit score I want to encourage you to

check out my new DIY credit repair

platform Beast diy.com there I offer you

two of the most advanced comprehensive

and convenient ways that you can attack

your credit repair process all on your

own terms and for a lot less money than

full service credit repair will ever

cost you I ain't never bought you guys

no BS to the table and it ain't going to

start now and if very last thing I

always got to do with you guys is let

you know how much I appreciate you for

your support like I know you guys can go

anywhere on the internet for your credit

information but you're here with me be

[Music]

[Music]

blessed