Scott Bilker

on Reducing Debt
Author and creator of

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Exclusive Interview

Scott Bilker on Reducing Debt

When it comes to reducing your debt, Scott Bilker can help. The author of the best-selling books Credit Card and Debt Management, How to Be More Credit Card and Debt Smart and Talk Your Way out of Credit Card Debt, also founded, a web site that helps consumers find the best borrowing options. Bilker educates people about debt and how to get out of it. For more than 17 years, he has made it his mission to find great credit deals, saving thousands of dollars for himself and others. His advice has been featured in Consumer Reports, Money Magazine, The Wall Street Journal, Newsweek, Kiplinger's Personal Finance Magazine, CNN/Money, Kiplinger's Success with Your Money, and CBS Plus. In our interview, he gives his advice on how you can reduce your debt.

Tell us how you personally reduced debt in your life and how that led you to become an expert.

In my last year of college, I turned to my credit cards to pay for tuition and books. Eventually, I realized I couldn’t afford those high interest rates. So I analyzed how I could save money through managing my debt properly. My friends who were in school asked me how I was paying for things and affording things. I gave them tips, and they saved money, too. People kept asking me for advice on what to do. This lead me to write my book, Credit Card and Debt Management: A Step-by-Step How-to Guide for Organizing Debt and Saving Money on Interest Payments.

What needs to happen in the first 30 days of reducing your debt?

It’s always important in early stages to focus your mind on your new goal, which is to be able to see all the opportunities you have to reduce your debt and pay it off. In the first 30 days, you want to get organized. Do some of the easier tasks that’ll help you get on the road to focusing on your goals.

What do you see as the biggest obstacle when people try to reduce debt, especially early on?

My karate instructor says my greatest obstacle is me. He says, “overcome it and you’ll achieve the greatest accomplishment of all.” How true that is with finances. People feel they’re at the mercy of the banks, and there’s nothing they can do. It can come from their circumstances, and it can come from beliefs that people have had since they were small.

The beliefs that keep people in debt are that they’re at the mercy of the bank [and] that they have no other options with their interest rates. The other one is that there are no lower-interest credit options for them because they’ve applied for too many cards. This paralyzes people, and they don’t take any action. The reality is, when you start to look for credit options, you’ll see them everywhere. It’s like when you get a new car. You’ve never seen one on the road. Then, you buy it and all of a sudden, you see it everywhere.

What makes the difference between success and failure?

Every day when you wake up, you have to ask yourself “good” questions. If you ask yourself, “what’s wrong with me that I can’t get out of debt?” you’ll get an answer, “it’s because I’m a loser and can’t handle my money.”

“Good” questions are “what can I do right now to begin eliminating my debt? What can I do today?” If you ask those, you’ll get a good answer like, “I’m going to look at my interest rates this morning. I’m going to call my banks today. What bank am I going to contact today to reduce my rates? Where am I going to look online today to find some new lending options?”

How much of reducing debt is mindset and how much of it is a practical task?

I think in the first 30 days, your mindset is the most important thing. You have to know when you’re being destructive. If you start down the path of taking action without creating the right mindset, and then you’ll fail. It’s like a fad diet. You hear about it, learn a couple things about it and start doing it.

The past is done. The past doesn’t equal the future. From this point forward, every action you take is going to be to reduce your debt, pay it back—to be “debt smart.” You can’t change the past. It’s irrelevant now. Go forward with the right attitude and take the right steps.

What are the three most important things a person can do in the first 30 days to have long-term success reducing their debt?

1. Get organized financially. Have a functional checking account, a filing system for all of your bills, debts, etc. You may just have that stuff piled up on the kitchen table, and that’s going to be your downfall. There is no way to know what to do if you don’t know where you are. Create a plan in the first 30 days.

2. Become more efficient with your current interest rate. Either negotiate with banks or transfer your balances to cards with lower rates. On I have a recommended list of credit cards to transfer balances to. Don’t cut up your credit cards. When you cut up your cards, you cut out your credit options. You don’t want to transfer all your balances to one account and close your other accounts. Because if something happens and you’re late once or twice, that credit card will raise its rate to 30% or more, the default rate. Then, you’ll be paying 30% and you won’t get anymore credit because your credit score is messed up. If you have your other cards, you can call and negotiate a lower rate for a balance transfer.

3) Start thinking about how to earn extra money. Even if you get your rates down to zero, you still have to pay it back eventually. It may be easier to earn a little more money to get you out of the situation you’re in. Everyone’s had those ideas where they say, “I should have acted on that. That guy made a million dollars on my idea.” So act on your entrepreneurial ideas. Obviously you don’t want to go crazy and try something that’s insanely risky. But you can do simple things, like selling your extra things online. Don’t have a garage sale and basically give your stuff away.

There are so many online opportunities to make money. For example, web sites pay people to be online jurors. It’s practice for attorneys before going to trial. There are lots of honest opportunities like that.

What are your other suggestions for making more money?

The best investment you can make is to invest in yourself. Invest in your ideas. Invest in education. Go back to school. Ask yourself, “what training can I take now that will get me a raise? Can I go back and [attend] community college, finish my undergraduate degree or go to graduate school?” If you’re a teacher, did you ever think about being an administrator? Furthering your education is the smartest way to earn more money.

If you don’t reduce the cost of your debt, you’re wasting your time earning more. If you spend 10 hours on the phone reducing your interest, and you save $1000 a year by doing that, it’s like making $100 an hour and putting it toward your debt. There’s no way most people will get a job at $100 an hour. So before you go and earn more money, reducing the cost of your debt will be the most efficient use of your time.

How can you prevent yourself from going back into debt after you’re in the clear?

Hopefully you will learn to buy only things you need. You have to learn to be happy with what you have. That’s the way to avoid buying more stuff.


What is the belief that you personally go to during times of change?

I remind myself that there’s only one thing that’s guaranteed to not change, and it’s that there will always be change. I have a hard time with change. I strive to embrace the process and enjoy it.

The best thing about change is…

…the hope that things are going to be better than they were before.

What is the best change you have ever made?

I decided to be thankful for everything I have all the time and not focus on what I don’t have.

For more information on Scott Bilker, visit


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