July 1, 2025 • 12 mins
In Part 3 of The 5 Wealth Killers No One Talks About, George Jameson, CFP® and founder of Capital Wealth Group, exposes a silent drain on your finances that’s more common than you think.
Welcome to "The Retirement Guide" Podcast! I'm your host George Jameson, owner of Capital Wealth Group, a Fee Only Advisory firm. Whether you’re nearing retirement or already retired, Join me each week as we explore the world of retirement planning and equip you with the knowledge and tools you need for a successful retirement.
Thank you for tuning in to this episode of The Retirement Guide. If you enjoyed this episode, please subscribe & leave a review. If you'd like a free 30-minute retirement review, visit our website at www.capitalwealthplan.com to schedule.
This is for education only.It is not tax, legal, or investment advice. Before acting on any information consult your tax, legal, or investment advisor.
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Visit our Website: Capital Wealth Group
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Capital Wealth Group is a Flat Fee-Only Advisory Firm located in Columbia, SC , serving clients locally in South Carolina and North Carolina and virtually nationwide.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
George Jameson (00:00):
Welcome back to Your Retirement Guide podcast.
I'm George Jameson, certifiedfinancial planner and founder of
Capital Wealth Group inColumbia, South Carolina.
Last week I talked about howbuying too expensive of a car
can be a silent wealth killerover time, and how to buy a
quality used vehicle withoutbreaking the bank.
(00:21):
Now today we'll explore thethird Silent Wealth Killer,
which is high interest personaldebt like credit card debt,
which has compounding rates.
Please note, if you're alreadydebt free, which a lot of my
listeners are, congratulations,but please listen anyway and
(00:44):
share this episode with someoneyou know who may have a spending
problem, or who already hascredit card debt.
High interest debt, especiallycredit cards, can quietly derail
your financial progress throughcompounding interest that far
outpaces typical investmentreturns.
(01:06):
The current average APR is nowabove 21%.
And US households carry over$1trillion in credit card
balances.
In addition, delinquency rateshave been going higher in recent
quarters.
The best thing you can do is payoff your credit card each month
(01:30):
and set it on Autodraft to makesure.
However, life happens, and asthe stats show, a lot of people
carry credit card balances.
But by understanding howinterest compounds, selecting
the right payoff method andfollowing a structure repayment
(01:51):
plan.
You can get outta debt for goodand save thousands of dollars in
interest, protect your creditand free up important cash flow
for savings and investments.
So over half of us, about 53% ofcredit card users carry a
(02:11):
balance for at least a year ormore, and with APRs running
between 20 to 28%, that debt cansnowball fast.
You've probably heard the sayingoften linked to Einstein about
compound interest being theeighth wonder of the world.
Whether he really said it ornot, it nails the idea.
(02:34):
Interest earns interest.
That's great when it's workingfor you, but brutal when it's
working against you.
Here's a quick example on a$10,000 card balance.
At 22% APR compounding monthly,you'd owe nearly$19,600 after
(02:56):
five years.
If you only made minimumpayments, that's almost$10,000
extra you never meant to spend.
Now let's talk about how to getoutta debt.
There are two primaryaccelerated payoff methods you
can use.
Number one is the debtavalanche.
This is basically where you payminimums on all debts and then
(03:19):
apply extra funds to the highestAPR balance.
First.
This method saves the mostinterest over time.
And then number two is the debtsnowball.
This is where you pay minimumson all debts.
Apply extra funds to thesmallest balance first to build
momentum, trading some interestsavings for psychological wins.
(03:43):
This is the method that DaveRamsey preaches.
Both strategies work well if youare disciplined, but it's not
that easy.
And one way to avoid debtaltogether is obviously don't
overspend, keep a budget andalso make sure you have at least
(04:03):
a 12 month emergency fund.
In case life throws you a curveball, like losing your job,
having to take a major pay cut,losing a business major
unexpected expenses, and so on.
A 12 month emergency fund shouldhelp keep you from running up
(04:25):
large credit card debt.
Your dad, your sister, or maybeyou or any one of us.
Could face a sudden income drop,a market crash, or an unexpected
expense it's tempting to grabthe credit card or take a loan,
but carrying high interestbalances can nibble away at your
(04:46):
financial future faster than yourealize.
No matter how bad it gets,avoiding or eliminating the
expensive debt is the first stepback to shore.
Now if you or someone you know,finds yourself and then major
credit card debt.
Here are some steps you cantake.
First, list all your debts withbalances, APRs, and minimum
(05:13):
payments.
Second, choose your method,either the avalanche for math or
the snowball for psychology.
Three, free up cash by trimmingdiscretionary expenses and or
pausing non-essentialsubscriptions.
You may want to delete yourAmazon app cancel cable,
(05:35):
Netflix, gym memberships, tripsto Starbucks, out to eat, and so
on at least temporarily.
If income is your problem, youmay want to find a second job
again, at least temporarily,until you have paid off your
credit cards.
Number four, redirect the freecash towards your target debt
(05:57):
each month.
And then automate payments toensure consistency and avoid
missed payments, which cantrigger late fees and rate
hikes.
And then I personally recommendusing some type of spreadsheet.
You can find some free onesonline or just simply use pen
and paper.
And now for some emotional andpractical tips, don't punish
(06:19):
yourself.
Celebrate each debt paid offwith a small budgeted reward.
Avoid new debt of course, lockaway the credit cards.
Again, delete your Amazon orwhatever app you use to make
purchases on your phone.
Cancel all essentialsubscriptions and set alerts to
(06:40):
curb impulse spending.
If you can pay off your debt onyour own, great.
Please do so.
This is the best way to go aboutit.
Follow a plan like the two Imentioned, and stick to a
budget.
But if you just feel like youcan't do it alone, there are
options and you may want to seekhelp, whether it's through a
(07:03):
friend or someone you knowthat's really good at doing
this.
Or if you have no one to go towhen your credit card bills
start really piling up, it canfeel impossible to dig out.
So here's two options you maywant to consider.
However, there are pros and consto each.
And please do your own researchbefore deciding on this route.
(07:27):
The first is to work with acredit counselor.
Think of a nonprofit creditcounselor as a coach for your
debt.
But before you sign up for adebt management plan, ask about
their fees there are some thatare free, but make sure you read
the fine print.
And then also ask what theyactually do for you.
(07:49):
A good counselor can haggle withyour issuers to lower rates or
even roll multiple cards intoone easier payment.
However, there are somedrawbacks to this option, but
for some, this is a good choice.
The second option would be tonegotiate directly with your
credit card companies.
(08:09):
Keep in mind, this will alsohurt your credit score.
But if you're deeply into creditcard debt, this may be an option
for you.
So believe it or not, you havemore leverage than you think.
Credit card companies hatedefaults.
They'd rather get 50 cents onthe dollar than nothing at all.
So here's how you may want to goabout it.
(08:31):
From zero to 60 days overdue,you'll usually just get
reminders and late fees.
And then from 60 to 90 daysoverdue calls get more frequent
and serious.
This is when you definitely wantto start telling them, Hey, I'm
in a bind.
But I want to pay this off andcan you work with me?
(08:54):
Around the 90 day overdueperiod.
This would be a primenegotiation time.
Creditors are most open to asettlement at the 90 day period.
However, you don't want to gopast a hundred or 120 days'cause
that's when credit cardcompanies typically charge off
(09:15):
your account and sell yourbalance to a collections agency.
And once it's sold, you're stucknegotiating with debt buyers who
are often tougher and lessflexible.
So what a settlement may looklike.
Sometimes you'll pay a one lumpsum, say 40 or 50% of what you
(09:36):
owe, and walk away with a zerobalance.
Other times you'll agree to alower interest rate or even a
structured plan.
And then often you'll do a mixbetween a lump sum or down
payment and then a payment plan.
So bottom line, don't panic, butplease do act.
(10:00):
Reach out early, explain yoursituation and work out a deal
before your debt heads tocollections.
Remember that every dollar youdivert from interest is a dollar
you can save, spend, and investfor retirement.
So some final thoughts.
High interest debt may be themost insidious wealth killer out
(10:20):
there, slowly draining resourcesthrough compounding interest
while you sleep, but withawareness of rates, a clear
payoff strategy and disciplineexecution.
You can break the cycle, savethousands, and redirect your
cash flow toward building reallasting wealth.
And one more thought.
(10:41):
If you're not already in creditcard debt, one key is to have a
12 month emergency fund becauselife does throw us curve balls.
That wraps up today's episode.
Please share this with anyoneyou know to either help them
avoid going into major creditcard debt or help those who need
(11:02):
to get out from under it andplease subscribe.
If you're serious aboutretirement planning and like a
one-time plan or help withongoing investment management
and retirement planning, pleasevisit my website and schedule a
free consultation@www.capitalwealth plan.com.
(11:23):
Next week we'll tackle thefourth silent wealth killer.
So stay tuned.
Thanks for listening and have agreat day.
Welcome back to Your Retirement Guide podcast.
I'm George Jameson, certifiedfinancial planner and founder of
Capital Wealth Group inColumbia, South Carolina.
Last week I talked about howbuying too expensive of a car
can be a silent wealth killerover time, and how to buy a
quality used vehicle withoutbreaking the bank.
(00:21):
Now today we'll explore thethird Silent Wealth Killer,
which is high interest personaldebt like credit card debt,
which has compounding rates.
Please note, if you're alreadydebt free, which a lot of my
listeners are, congratulations,but please listen anyway and
(00:44):
share this episode with someoneyou know who may have a spending
problem, or who already hascredit card debt.
High interest debt, especiallycredit cards, can quietly derail
your financial progress throughcompounding interest that far
outpaces typical investmentreturns.
(01:06):
The current average APR is nowabove 21%.
And US households carry over$1trillion in credit card
balances.
In addition, delinquency rateshave been going higher in recent
quarters.
The best thing you can do is payoff your credit card each month
(01:30):
and set it on Autodraft to makesure.
However, life happens, and asthe stats show, a lot of people
carry credit card balances.
But by understanding howinterest compounds, selecting
the right payoff method andfollowing a structure repayment
(01:51):
plan.
You can get outta debt for goodand save thousands of dollars in
interest, protect your creditand free up important cash flow
for savings and investments.
So over half of us, about 53% ofcredit card users carry a
(02:11):
balance for at least a year ormore, and with APRs running
between 20 to 28%, that debt cansnowball fast.
You've probably heard the sayingoften linked to Einstein about
compound interest being theeighth wonder of the world.
Whether he really said it ornot, it nails the idea.
(02:34):
Interest earns interest.
That's great when it's workingfor you, but brutal when it's
working against you.
Here's a quick example on a$10,000 card balance.
At 22% APR compounding monthly,you'd owe nearly$19,600 after
(02:56):
five years.
If you only made minimumpayments, that's almost$10,000
extra you never meant to spend.
Now let's talk about how to getoutta debt.
There are two primaryaccelerated payoff methods you
can use.
Number one is the debtavalanche.
This is basically where you payminimums on all debts and then
(03:19):
apply extra funds to the highestAPR balance.
First.
This method saves the mostinterest over time.
And then number two is the debtsnowball.
This is where you pay minimumson all debts.
Apply extra funds to thesmallest balance first to build
momentum, trading some interestsavings for psychological wins.
(03:43):
This is the method that DaveRamsey preaches.
Both strategies work well if youare disciplined, but it's not
that easy.
And one way to avoid debtaltogether is obviously don't
overspend, keep a budget andalso make sure you have at least
(04:03):
a 12 month emergency fund.
In case life throws you a curveball, like losing your job,
having to take a major pay cut,losing a business major
unexpected expenses, and so on.
A 12 month emergency fund shouldhelp keep you from running up
(04:25):
large credit card debt.
Your dad, your sister, or maybeyou or any one of us.
Could face a sudden income drop,a market crash, or an unexpected
expense it's tempting to grabthe credit card or take a loan,
but carrying high interestbalances can nibble away at your
(04:46):
financial future faster than yourealize.
No matter how bad it gets,avoiding or eliminating the
expensive debt is the first stepback to shore.
Now if you or someone you know,finds yourself and then major
credit card debt.
Here are some steps you cantake.
First, list all your debts withbalances, APRs, and minimum
(05:13):
payments.
Second, choose your method,either the avalanche for math or
the snowball for psychology.
Three, free up cash by trimmingdiscretionary expenses and or
pausing non-essentialsubscriptions.
You may want to delete yourAmazon app cancel cable,
(05:35):
Netflix, gym memberships, tripsto Starbucks, out to eat, and so
on at least temporarily.
If income is your problem, youmay want to find a second job
again, at least temporarily,until you have paid off your
credit cards.
Number four, redirect the freecash towards your target debt
(05:57):
each month.
And then automate payments toensure consistency and avoid
missed payments, which cantrigger late fees and rate
hikes.
And then I personally recommendusing some type of spreadsheet.
You can find some free onesonline or just simply use pen
and paper.
And now for some emotional andpractical tips, don't punish
(06:19):
yourself.
Celebrate each debt paid offwith a small budgeted reward.
Avoid new debt of course, lockaway the credit cards.
Again, delete your Amazon orwhatever app you use to make
purchases on your phone.
Cancel all essentialsubscriptions and set alerts to
(06:40):
curb impulse spending.
If you can pay off your debt onyour own, great.
Please do so.
This is the best way to go aboutit.
Follow a plan like the two Imentioned, and stick to a
budget.
But if you just feel like youcan't do it alone, there are
options and you may want to seekhelp, whether it's through a
(07:03):
friend or someone you knowthat's really good at doing
this.
Or if you have no one to go towhen your credit card bills
start really piling up, it canfeel impossible to dig out.
So here's two options you maywant to consider.
However, there are pros and consto each.
And please do your own researchbefore deciding on this route.
(07:27):
The first is to work with acredit counselor.
Think of a nonprofit creditcounselor as a coach for your
debt.
But before you sign up for adebt management plan, ask about
their fees there are some thatare free, but make sure you read
the fine print.
And then also ask what theyactually do for you.
(07:49):
A good counselor can haggle withyour issuers to lower rates or
even roll multiple cards intoone easier payment.
However, there are somedrawbacks to this option, but
for some, this is a good choice.
The second option would be tonegotiate directly with your
credit card companies.
(08:09):
Keep in mind, this will alsohurt your credit score.
But if you're deeply into creditcard debt, this may be an option
for you.
So believe it or not, you havemore leverage than you think.
Credit card companies hatedefaults.
They'd rather get 50 cents onthe dollar than nothing at all.
So here's how you may want to goabout it.
(08:31):
From zero to 60 days overdue,you'll usually just get
reminders and late fees.
And then from 60 to 90 daysoverdue calls get more frequent
and serious.
This is when you definitely wantto start telling them, Hey, I'm
in a bind.
But I want to pay this off andcan you work with me?
(08:54):
Around the 90 day overdueperiod.
This would be a primenegotiation time.
Creditors are most open to asettlement at the 90 day period.
However, you don't want to gopast a hundred or 120 days'cause
that's when credit cardcompanies typically charge off
(09:15):
your account and sell yourbalance to a collections agency.
And once it's sold, you're stucknegotiating with debt buyers who
are often tougher and lessflexible.
So what a settlement may looklike.
Sometimes you'll pay a one lumpsum, say 40 or 50% of what you
(09:36):
owe, and walk away with a zerobalance.
Other times you'll agree to alower interest rate or even a
structured plan.
And then often you'll do a mixbetween a lump sum or down
payment and then a payment plan.
So bottom line, don't panic, butplease do act.
(10:00):
Reach out early, explain yoursituation and work out a deal
before your debt heads tocollections.
Remember that every dollar youdivert from interest is a dollar
you can save, spend, and investfor retirement.
So some final thoughts.
High interest debt may be themost insidious wealth killer out
(10:20):
there, slowly draining resourcesthrough compounding interest
while you sleep, but withawareness of rates, a clear
payoff strategy and disciplineexecution.
You can break the cycle, savethousands, and redirect your
cash flow toward building reallasting wealth.
And one more thought.
(10:41):
If you're not already in creditcard debt, one key is to have a
12 month emergency fund becauselife does throw us curve balls.
That wraps up today's episode.
Please share this with anyoneyou know to either help them
avoid going into major creditcard debt or help those who need
(11:02):
to get out from under it andplease subscribe.
If you're serious aboutretirement planning and like a
one-time plan or help withongoing investment management
and retirement planning, pleasevisit my website and schedule a
free consultation@www.capitalwealth plan.com.
(11:23):
Next week we'll tackle thefourth silent wealth killer.
So stay tuned.
Thanks for listening and have agreat day.
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