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How To Beat The Lenders At Their own Game

If you want to beat the lenders at their own game, then read this post completely, after reading this post, you will have a lot of knowledge of finance. we have tried to explain to you Robert and Kim Kiyosaki’s Story. how you can beat the lenders at their own game. which principles use Robert Kiyosaki to beat the lenders at their own game. So, please read our full post to get complete details.

Table of Contents

Beat the Lenders At Their Own Game

How We Got Out of Debt –

Robert and Kim Kiyosaki’s Story

While Robert and Kim enjoy tremendous financial success now, they too have

experienced their share of tough times. This is their story, as told by Kim:

In 1985, Robert and I had a great deal of bad debt. And even though we kept

making payments every month we never seemed to make a dent in the amount

we owed. Each month we paid a little over the minimum on each one of our

credit cards as well as on our car loan. Obviously, there had to be a better way to

get ourselves out from under our creditors. And sure enough, there was.

This is the formula Robert and I followed to pay off our debt. You’ll find that

if you follow our formula you will be out of debt much quicker than you

imagined. Most people find themselves “bad” debt-free within 5-7 years. The

key is to stick with the formula. You will not get ahead if you say I’ll just skip

this month, and then two, and then three. If you stick with the formula it then

becomes a habit you follow for a lifetime.

Here is the formula we used.

how to beat the lenders at their own game

Step #1 – Stop accumulating bad debt. Whatever you purchase via credit

cards must be paid off in full at the end of each month. No exceptions.

Step #2 – Make a list of all of your consumer (bad) debts. This includes each

credit card, car loan, school loan, home improvement loan on your

personal residence, and other bad debts you have acquired. (One item on

my and Robert’s list was an outstanding debt to a partner from one of

Robert’s past businesses). You can even include your home mortgage on

this list.

how to beat the lenders at their own game



Step #3 – Next to each item listed make three columns:

  • Amount Owed
  • Minimum monthly payment• Number of months

Enter the appropriate numbers into each column. To arrive at the number

of months, simply divide the amount owed by the minimum payment.

Step #4 – Based solely on the number of months, begin ranking each debt.

Put a “1” next to the lowest number of months, a “2” next to the second-

lowest number and continue up to the highest number of months. This is

the order in that you will be paying off your various debts.

The reason you start with the debt with the lowest number of months is

that you want to have your first “win” or success in the program as soon

as possible. Once you get that first credit card (or debt) paid off you’ll

begin to see the light at the end of the tunnel.

how to beat the lenders at their own game

Step #5 – Come up with an additional $150-200 per month. If you are serious

about getting out of debt, and more importantly becoming financially

free, then generating this extra money will not be difficult. To be candid,

if you cannot generate an additional $150 per month then your chances of

becoming financially independent are slim. (You may need some of the

resources in the next chapter to help you get back on track.)

Step #6 – Pay the minimum amount on every debt that you have listed except

for the one you’ve marked with a “1”. On this first debt to be paid off,

pay the minimum amount due plus the additional $150-200. Keep doing

this every month until your first debt is paid off. Scratch that debt from

your list.


Step #7 – Congratulate yourself!

how to beat the lenders at their own game

Step #8 – Pay the minimum amount due on every debt that you have listed

except for the one you’ve marked with a “2”. To this debt, pay the

minimum amount due plus the entire amount you’ve been paying on debt

#1. For example, on debt #1 your minimum amount due was $40, and you

added the additional $150 so you were paying a total of $190 each month.

On debt #2, if the minimum amount due is $50, you will now pay that

$50 plus $190, for a total of $240 per month.

how to beat the lenders at their own game

After each debt is paid off, take the total you were paying on that debt and

add it to the minimum amount due on your next debt to get your new

monthly payment. You will be amazed at how quickly this amount adds

up and how quickly your credit cards, car loans, etc., are paid off.

how to beat the lenders at their own game

Continue this process until all of the debts on your list are paid off.

how to beat the lenders at their own game

Step #9 – Congratulate yourself.

how to beat the lenders at their own game

Step #10 – By this time the monthly payment you were paying on your last

debt is likely to be quite substantial. Keep paying that amount every

month. Except now, instead of paying it to your creditors, you can pay it

to yourself until you build an emergency savings fund and then start

investing. You’re on your way to building wealth!

The method Robert and Kim described is very powerful. In fact you may be able

to slash the amount of time and money it takes to pay off your debt dramatically.

For example, let’s say you have the following debts:

Guess how long it will take you to pay off that $14,380 debt if you are

making the minimum payments?

Only 182 years and one month.

And you’ll pay over $72,000 in interest. In Biblical times the lender would

be stoned to death for such usury.

How can those numbers possibly be so high? In a nutshell, it’s due to tiny

minimum payments that go down as your balance goes down. Unlike a car loan

where you’ll have a fixed payment that will pay off your loan in, say, four or five

years, credit card issuers figure your monthly payments as a percentage of the

amount you owe. The minimum payment is already small, which is great when

you need to make a small payment, but lousy when you can’t pay more. As you

pay down the balance, the monthly payment goes down and the debt gets s-t-r-e-

t-c-h-e-d out.

how to beat the lenders at their own game

The debt reduction strategy that Robert and Kim used has several powerful

elements, and I’ve added one more tip to the mix to help make you successful

even faster. Here’s why it works:

  1. You keep your total monthly payment fixed. This is the first way to beatthe card issuers at their own game. In our example, the total monthly

how to beat the lenders at their own game

payment is $296. As you pay down your debts, the amount your credit

card issuer will require you to pay will become smaller. But you won’t fall

for it. You’ll pay at least $296 each month until all the debts are paid. Just

doing that alone cuts the repayment period from 182 years and 1 month

down to just under 15 years and saves you over $63,000 in interest. You

can put down that Biblical rock.

how to beat the lenders at their own game

  1. You stop charging. If you must have a card for business purposes only,

keep it out of the plan. Let your business promptly pay off that card. But

for personal purchases don’t use a credit card. You’ve heard the saying: If

you’re in a hole, stop digging.

  1. You add extra if you can. If you can afford an extra $50 a month on our

example, you’ll be debt-free in just five years you’ll save over $65,000 in

interest. Whew!

  1. You target only one debt at a time. If you try to do too many things at once

you’ll lose focus and won’t get anywhere. If you focus on paying one debt

off at a time, you’ll be much more successful. For maximum savings, you

should target the highest rate of debt first. However, if you’re like Kim and

Robert want to see some fast results focus on the lowest balance first.

  1. You’ll have a plan. Research by the Consumer Federation of America and

the Bank of America found that people with as little as $10,000 a year in

income who reported having a written plan had twice as much money in

savings and investments as those without a plan. The same principle

applies when you are getting out of debt. Having a written plan can give

you that discipline and motivation you need.

Here are several different strategies for reducing debt as illustrated by the

Debt Reduction Report below:

Here’s a brief explanation of the various repayment strategies described in

the Debt Reduction Report:

  • Minimum Payment from Statement: This example shows how much you

would pay, and how long it would take to get out of debt if you made only

the issuer’s required minimum payments each month. As explained above,

your minimum required payments decline as your balance goes down,

stretching out the debt for a long time.

how to beat the lenders at their own game

  • Minimum Payment Held Constant: Here’s how long it would take to pay

how to beat the lenders at their own game

off your debt if you continued making the minimum payments currently

required by your statement. This corresponds with Robert and Kim

Kiyosaki’s instructions Beat the Lenders At Their Own Game 25 about dividing the balance by the current minimum payment. It’s faster than

paying the declining minimum payments and will save you money in the

long run.

how to beat the lenders at their own game

  • Debt Blaster without Pledge Money: This describes how long it would

take you to pay off the debt if you turbocharge your payment plan as we

described. You stick with the same total monthly payment that you must

make now, but as you pay down some debts you put the “extra” amount

above the minimum payment toward the highest rate of debt until it’s paid

off, and so on.

  • Debt Blaster with Pledge Money: If you can add some extra money

toward your total monthly payment you’ll get out of debt faster. In this

example, we added just $50 per month but saved much more than that in


how to beat the lenders at their own game

What you’re doing here is creating a tsunami effect. It will seem very slow at

first, but as soon as you start paying off a debt or two your plan will pick up

speed and you’ll start seeing dramatic effects.

If you’ve ever had a mortgage you probably noticed that in the first several

years most of your payment went towards interest, not principal (principal is the

amount you borrowed). But several years into the loan it starts shifting and near

the end your payment is mostly principal, not interest. Why do most of the

interest get paid off first? Because so many people refinance long before the loan

is paid off. Nowadays lenders want to earn as much interest as possible in the

loan’s early years. They don’t make money when you pay off principal, so the

principal payments are very low at the start and only grow once most of the

interest (read, profit) has been paid off.

how to beat the lenders at their own game

Turbocharge Your Debt-Free Plan

The lower your interest rate, the faster you’ll get out of debt. Many people are

still trapped in high-rate interest card debt, at interest rates ranging from 19.98%

to 29.99% or even higher.

how to beat the lenders at their own game

You’ll turbo charge your plan if you also try to get the lowest rates possible.

As you start to pay off your credit cards, you should constantly be looking for

ways to lower your interest rates.

how to beat the lenders at their own game

Talk Your Way Out of Debt

Scott Bilker is the author of Talk Your Way Out of Credit Card Debt. His website is found at Scott has made and recorded hundreds of calls with

banks in his efforts to lower interest rates for himself, his family, and friends. In his

book, he uses this real-life illustration:

He made 52 phone calls that took 403 minutes (6 hours, 43 minutes) and

saved $43,147.68. That’s an average savings of $107.07 per minute. Wouldn’t

you like to save over a hundred bucks a minute? Even $100 per hour is good.

Scott has over 50 credit cards and he has paid 0% interest on his balances for

the past 15 years. He also has maintained a great credit score and routinely racks

up all kinds of rewards. He’s clearly a credit winner.

Here is an excerpt from an interview where Gerri Detweiler, our contributing

editor and the host of Talk Credit Radio, asked Scott about his strategies for

getting lower credit card rates:

how to beat the lenders at their own game

Gerri: Scott, you know, I think there’s a sense these days that sometimes people

feel lucky they even have a credit card and have a credit line. So really, what are

Are issuers willing to do now in terms of negotiating with customers?

Scott: Well, you know, it’s still true that banks need profitable customers to

be profitable. So as consumers, we do hold the cards so to speak because we

decide where we spend our money. And even if interest rates aren’t the best

for banks, they still make money by charging merchant fees.

Gerri: There are a lot of people that are still paying pretty hefty interest rates,

given the fact that these banks are paying practically nothing to borrow this


how to beat the lenders at their own game

Scott: Yeah, that’s absolutely true. It’s not like the banks are going to lower

the interest rates just because they’re getting a better deal. The only time

banks are going to give out really good rates to credit cardholders who

have excellent credit scores and have had a relationship with the bank for


Gerri: For a long time, there was no downside to asking for a lower rate. Then

we went through a period about I’d say, 2009, when it actually got a little bit

risky because sometimes it would trigger an account review, and (your issuer)

would say, “Oh gee, well you have a lot of credit card debt, we’d like to lower

your credit limit,” and that lowers your score, and when your score goes down

your other (credit lines may) get lowered. So tell me, where we are and where

have we been in this process?

how to beat the lenders at their own game

Scott: Well you’re absolutely right, it might’ve been a little riskier before but

if you’re paying high rates and if you’re getting gouged for a lot of fees, it’s

important to stop that. So it’s always important to call the banks and try to

negotiate better rates and have fees waived. Today, you know, the swing is

now towards more credit card usage in the last few months. There had been

many reports that people are now using their credit cards more, certainly

during this holiday season. So once again, the banks have to decide if they’re

going to give good deals to people or if they’re going to let people just

transfer the balances or use (other) cards during the season.

Gerri: Let’s talk about what you do if you feel that your credit card rate is too

high. What do you think is too high these days?

Scott: You know, anything you’re paying is too high.

Gerri: Really?

how to beat the lenders at their own game

Scott: Unless it’s zero. Just look at your credit card statement right now,

whatever it is, if it’s not zero you want to try to get towards zero, I mean, zero

is perfect. I gotta tell you, I haven’t paid any interest for like, 15 years

already. I mean zero, absolutely nothing.

Gerri: Tell me what your credit score is. It has to be pretty good.

Scott: It’s 790. It’s been better. Yesterday it was 790, but the best it’s ever

been is 819.

how to beat the lenders at their own game

Gerri: That’s out of 850 on a FICO score, so that’s still a prime credit score.

Scott: Yeah, it’s a good score. Anything over 720 is quite good and you know,

I’ve got 50 credit cards.

Gerri: You still have 50?

how to beat the lenders at their own game

Scott: Yes. I used to have like 60 but a whole bunch of them got lost during

that credit crunch.

Gerri: Okay, I want to talk about that a little bit later on the show. But let’s start

with what to do when you talk to your credit card companies. So we’ve talked

about the fact that you do want to negotiate if you’re paying more than 0%. You

get on the phone, you’re a little bit nervous, what do you say to them?

Scott: That’s exactly why I wrote my book. Just for a moment about the book

because it’s important: The reason why I did this is for that very reason.

People are nervous, they don’t know what to say so what I did was I recorded

the banks. You know, how when you call the banks they record us for training

purposes? Well, I recorded them for training purposes, to train everyone on

how to deal with the banks. So the book has a whole bunch of calls – the

actual transcripts from the calls.

Gerri: And that’s your book – Talk Your Way Out of Credit Card Debt, right?

Scott: Yes, so that way people can read through them and kind of get a feel

for what’s going to happen.

Gerri: Let me add just real quick, you’ve made a lot of these calls, right?

Scott: Yes, in the book I have 52 but I’ve made hundreds. I just picked the

ones that would represent the basic outcome that you would have. So I would

say that, you know if you’re nervous about calling there are many things you

can do but you should always call. There’s nothing to be nervous about. Just

pick up the phone, give them a call, and the very first person, let’s say for

example we’re going to, let’s say, do something easy like waive a late fee.

That’s pretty easy to do. If you have a late fee and you’re listening right now,

after we’re done, call your bank, and get that thing waived especially if it’s your

first one. Just call up, and talk to the first person – hey, I was looking at my credit

card statement, and I noticed this late fee, can you waive that fee for me? And I

have never heard of a case for a first-time late fee when they didn’t waive the

fee. They always wave that fee no matter what, throughout the years, they

always do it.

how to beat the lenders at their own game

Gerri: So you don’t have to have some kind of good excuse as to why you were

late? Do you just have to ask for them to waive it?

Scott: Yep, that’s correct. And you can make up an excuse if you want but it

doesn’t matter, they’re going to waive it. I’ve never heard of somebody

calling for the first time and not having it waived. And I’ve made dozens and

dozens of calls just for that thing, just for that purpose – having the first late

fee waived. Even if you’ve had a couple of late fees in a row they’ll still waive

one or two of them. They might not waive them all, if you have say 6 in a row

it’s going to be a little trickier, you know, you might have to call and let them

know they’re going to get paid. But the bottom line is, if you do something like that, just call up, talk to the first person they’ll probably be able to do it.

Now when you try to lower interest rates or do more difficult things like

multiple late fees, something like that, chances are the very first person

you’re going to speak to will not be able to do it. So you’re going to ask to

speak to their supervisor, say, “Hey can I talk to your supervisor?” They’re

going to say, probably, my supervisor’s going to tell you the same thing. And

you just say, “Wonderful, I want to talk to your supervisor anyway.” Then

the supervisor’s going to get on the phone, you’re going to go through the

whole thing again and now we’ll see what the supervisor’s going to do. If

you’re just asking, it’s going to be difficult. You say things like, well, you

want to have a deal-breaker ready, something you’re going to do when they

don’t do what you want. So you say, “Listen, I got all these credit offers, I

want to transfer my balance so what do you want to do? Do you want to just

lower my rate or get rid of this fee or am I just going to leave you and not do

business with you and close my account?” Now prior to, say 2009 that you

were saying, that worked really well. After that, I definitely heard of cases

where people would say they didn’t care, they said okay, close my account.

And I even had that experience too before my business cards during this time

period. They said I didn’t use the card but I just bought an airline ticket the

month before, it’s like a thousand dollars! They’re like, well, you didn’t use it

before that. I’m like, are you kidding me? They’re actually closing my

account because of it – because of inactivity. I just spent a thousand dollars

last month and over the last 10 years, I spent almost $25,000!

Gerri: Okay, so if your issuer says no, you talk to a supervisor then at that point

do you give up on that issuer?

Scott: Well, that might be. You know, and if you go through the whole thing,

I’m going to close my account and you’re persistent. What I like to do too is

I’ll run the numbers because I use Quicken. I’ll just tell them how much I

spent, like in that case with the business card. I’ll be like, well I spent

$10,000 over the last 5 years and this much of it was interest, of course in my

case it’s zero so all they’re getting is the merchant fees. But they’re getting

merchant fees on that and interest, and I’m like, you really want to let that

go? And again, they’re not too bright so sometimes they’ll be like “sure.”

But if that’s the problem, if that happens you have many options. At there are a whole bunch of credit cards you can turn to to get lower

rates and I would start there and start looking for a new bank if you do have one. But if you do, the best place to turn to transfer your balance when

banks don’t do what you want is to the other credit cards that you have, that

you’ve had for a while. Like I’ve said, I have 50 cards, people think it’s

ridiculous, you know. If I use them all Gerri, today’s show would be about

bankruptcy and how to get out of it, because I cannot use all those cards and

pay them all. So what happens is I have so many cards with a zero balance

that if any one of the few cards that I’m using gives me trouble and then they

don’t do what I want when I want to call up to try to negotiate better rates and

better deals, then I’ll just call all the other ones – and it’s the same kind of

negotiation. I want to now shop for another rate but I’ve got a lot of calls I

can make. So I’ll call one bank, “Hey I want to transfer my balance to you,

I’ll transfer $10,000 right now but you got to give me zero or 1% or

whatever’s better than what I’m getting now.” And I’ll just go through all of

them until someone does that, but I have a lot of options. That’s why I like to

have a lot of open lines of credit.

In the interview, Scott goes on to explain how he takes advantage of credit

card rewards programs. For example, in addition to not paying interest for years,

he hasn’t paid for a movie ticket in years – and he has three kids. As he says,

“That’s a lot of popcorn and movie tickets.” Listen to Gerri’s interview with

Scott at

As Scott points out, if you want your card company to lower your interest

rate, you have to ask. They may or may not, but you won’t know unless you try.

As my father (and yours too, probably) always said: “It never hurts to ask.” So,

go ahead, stand tall and ask for a rate reduction.

The main reason card issuers will often negotiate with you is because they

want to keep cardholders with balances. After all, that’s how they make money.

Many times they’d rather lower your interest rate than lose you as a customer. Of

course, this means you’re not going to call and threaten to pay off your entire

balance unless they lower your rate. What incentive does the issuer have there?

None. So state that you’re better able to make the monthly payments with a

lower rate. That’s what they want to hear. Then, when you get the lower rate,

work to pay the entire balance off.

Many people are intimidated by the thought of negotiating with their credit

card company. There is no need to feel this way. Just remember the other thing

my father always said: “He who cares least, wins.”

You can be sure that the credit card company really doesn’t care about you as an individual, or about your unique concerns and issues. You are a billing unit,

one of the millions of indistinguishable billing units. You exist merely to provide

profit. And let’s be honest, if you run the company you’d see it that way too.

But if they care that little about you (and they do care – that little), why then

should you care what they think about you?

Be assured that the customer service representative you speak with won’t

remember you an hour later. They speak with hundreds and hundreds of people

every day. Do you really think that they go home at night and gossip about the

embarrassing credit problems John in Des Moines is experiencing? Don’t flatter

yourself. The fact is, your customer service representative these days probably

lives in India and goes home at night worrying about his or her own financial

problems, not yours. They may be worried about putting food on their own table.

How do you rate on their continuum? Food on the table … John in Des Moines.

Your insignificant problems don’t even register in their consciousness.

Now that we have the context established, stop caring what these

understandably uncaring people think about you and start negotiating to your

advantage. Ask for lower rates and do it without a care. They’re not going to bite

you or write you down for asking. They don’t care. And neither do you. And by

caring least about it, not worrying about it, not having one cautious doubt about

it, you will win.

Another way to win is to simply transfer balances to cheaper cards. If you

still have plenty of credit available, this can be a terrific money saver. Call each

of your issuers and tell them you have credit card balances and are shopping for

the lowest rate to consolidate those balances. Ask them what they can do for

you. (It’s helpful to keep notes on what each one offers). If you’re not up to your

eyeballs in debt or have poor credit, you should get some very good offers.

Look out for the following when you’re doing this:

  • Balance transfer fees can add up. Some issuers will charge a transfer fee of

as much as 2-4% of the transfer amount. In the past, these fees were often

capped at $50 – $75 but now they are often unlimited. Ask about this fee

and try to get it waived if it’s high.

  • Tiered rates. If you already have a $2000 balance on a card at, say, 18%,

and you transfer a new balance of, say, $1000 at 4.9%, issuers traditionally

will apply your payments to pay down the 4.9% part of the balance

first. This is the exact opposite of what I recommend if you’re trying to get

out of debt. Thanks to the Credit CARD Act, however, there is a way to

pay off that higher rate balance without having to first eliminate the low-rate balance. Here’s the trick: Under the CARD Act, any payment you

make above the minimum payment must be applied to the higher rate

a portion of your balance. So try to pay as much as you can above the

minimum to reduce that higher rate portion of your balance as quickly as


  • If your card issuers won’t budge, you may have to play hardball with them

or get a professional to help you.

FAQ – Frequently Asked Question & Answers

What Is a Lender? A lender is an individual, a group (public or private), or a financial institution that makes funds available to a person or business with the expectation that the funds will be repaid. Repayment will include the payment of any interest or fees.
Lenders are individuals, groups, or institutions that let you borrow money for a set period of time and repay it with interest. They come in various forms, from banks and credit unions to friends and family and specialized institutions.
The buyer of a bond is a lender. The seller of a bond is a borrower. The bond buyers pay now in exchange for promises of future repayment—that is, they are lenders. The bond sellers receive money now and in exchange for their promises of future repayment—that is, they are borrowers.
The three main types of lenders are mortgage brokers (sometimes called “mortgage bankers”), direct lenders (typically banks and credit unions), and secondary market lenders (which include Fannie Mae and Freddie Mac).


This post concludes that how should we beat landers at their own game and how should we avoid the lenders and we should have good financial knowledge.

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