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Nicholas Lawrence had maxed himself out.
A couple of years ago, he had hit the spending limit on all of his credit cards, and he was struggling to bring his balance down. He owed $2,000. His credit score was damaged by missed payments from the time he was in the hospital for meningitis and the time he lived in abroad for a few months.
His credit score had dropped to 515, preventing him from getting more credit.
“It was all on me,” says Lawrence. “I wasn’t really managing my finances properly. I’d try to put myself on a payment plan to lower my balance. I’d keep doing that, and I’d keep doing that, but then I might make just the minimum payment the next month. And then a couple months later, I’d be back to where I started.”
His moral was down. It was as if he was running in place, never getting anywhere.
Thanks to Debitize, he completely turned it around.
Now, this 23-year-old mechanic, student and entrepreneur from Tampa, has his finances firmly under control. He owns a quickly expanding business and has a back pocket full of high-limit credit cards — plus $1,400 in travel rewards he’s earned from his spending.
His credit score rose from 515 to 710 in less than a year. It’s continued rising, and is now up to 734 — a net increase of 219 points!
This App Turns Your Credit Card Into a Debit Card
Lawrence’s sister told him to try Debitize, an new app that’s quickly gaining popularity, that helps turnsyour credit cards effectively into debit cards and helps you stay on top of your credit card payments.
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Here’s the basic principal behind the idea:
Whenever you purchase something, whether it’s groceries, gas, or clothing, you could use either a credit card or a debit card. (OR cash…if you’re feeling wild)
Regardless of choice — debit or credit — each has it’s pros and cons.
Premium credit cards offer great incentives, such as cash back or travel perks, but they also make it easy to rack up debt, which can quickly spiral out of control. If you don’t pay off your balance completely every month, you wind up paying a lot of compounding interest. To make matters worse, if you miss a payment, there are late fees. On the flip side, you have the flexibility of spending money you don’t have, you get credit protection, a layer of security between you and your personal finances, and so much more.
Debit cards don’t usually offer rewards, or they’re so low they’re not really worth it, but they won’t put you into debt, either. It’s pay-as-you-go spending, once you hit zero, that’s the end of the road. Since a debit card is linked to your bank account, you literally cannot spend money that you do not have.
Debitize combines the best of both worlds? It’s core basic principal is, it turns your credit card into a debit card, for free, you get all the perks and rewards, without the risk.
Lawrence uses Debitize to connect his credit cards to his bank account. (Debitize is secured with 256-bit encryption, which is what most banking apps use, and makes sure your data is safe.)
Going forward, whenever you swipe your credit card, Debitize pulls the same amount of cash from your bank account and transfers that money to your Debitize reserve account. It then automatically uses that money to pay your credit card bill a week before it’s due. Meaning, you never miss a payment, and you don’t have a chance to spend more than you have.
For Lawrence, it was the best of both worlds: He could build his credit and get sweet credit card rewards, and he was able to prevent himself from running up unmanageable credit debt.
To prevent overdrafts, Debitize won’t withdraw funds below the minimum balance in your checking account. Any credit card purchases that you make beyond that will just get added to your credit card debt — Lawrence tries to avoid that.
‘It Did It on Its Own’
That’s just the free version of Debitize, there are a few advanced features available which really take the experience to the next level.
A few months after getting started, Lawrence upgraded to the premium version of Debitize, which cost him $4.99 a month. It has a feature called “Credit Optimizer,” which pays his credit card bills once a week instead of once a month.
Weekly, when Debitize paid off that week’s credit card purchases, Lawrence was having the app automatically pull extra money out of his account. That extra money steadily chipped away at his credit card balances, as the balances went down, so did his accrued interest payments.
The best part was, he didn’t even have to sacrifice much to do this. He barely noticed it as it was happening.
“It pretty much just brought down my balances on its own,” he says. “Yeah, it’s expensive to pay off your debts, but Debitize was doing it behind my back with my permission. Because it was automated, I didn’t fall off the boat.”
This Florida Man Dramatically Improved His Credit
A little over a year ago, Lawrence had two credit cards — a Capital One and a Discover card — each with a $1,000 limit, each completely maxed out.
Here’s what changed once he started using Debitize:
- In only six months, he’d paid down his balances enough so he had about $600 credit available.
- He applied for another credit card and was able to get a Capital One secured card with a $500 limit.
- His existing card Capital One card was upgraded to a Capital One Quicksilver card with 1.5% cash back on purchases, a $1,000 credit limit, and an additional $2,500 credit line.
- Then, once his credit score hit 680, he was approved for a Chase Sapphire Reserve card with a $10,000 credit limit. Chase quickly raised the limit by $4,000.
- His Discover card upped his credit limit to $2,000.
- In a very short period of time, his credit had grown nearly 10x!
Total credit available to Lawrence: $19,000.
For rewards, he currently has about 80,000 points, which he estimates is worth $800 in cash or $1,400 worth of travel rewards. He used some of his points to book a free flight to Rome. Sometime next year, he plans to fly to Japan with points.
How Much of Your Credit Do You Use?
Debitize’s Credit Optimizer keeps Lawrence’s credit card balance lower throughout the month, which helps lower his “credit utilization ratio” — which is the percentage of available credit that he actually uses. That’s one of the biggest factors in your credit score.
Debitize claims that many of its Credit Optimizer users have seen a significant boost to their credit scores.
Lawrence was able to boost his score by 219 points over a year and a half, the app helped him improve his credit by eliminating late payments and lowering his credit utilization — as the process went on, it snowballed.
As his credit improved, he got three new credit cards in the following 18 months — better credit cards. He acquired more credit, which meant he had a lot of accumulated credit that he wasn’t even using. That meant his credit utilization rate got better and better. This resulted in his credit score skyrocketing, which resulted in new offers for more credit. So on and so on, just what Lawrence needed at this point in his life.
Bottom line: “I started keeping my balances under 30%,” Lawrence says.
Growing His Business
Lawrence is an entrepreneur, and his financial improvements and expanding credit helped him grow his business.
He’s a mechanic, and inherited a truck repair shop from his retired father. The garage is in the back of a building he owns. Out front, he’s running a small car dealership.
He buys cars at auction, fixes them up, and displays them for sale on his small lot. He typically has 7 to 10 cars at once.
His increased credit has made it easier to buy and sell cars.
“Having high-limit credit cards has given me the ability to move money around,” Lawrence says. “And because I can move money around, I’ve been able to make more money.”
Now that his immediate financial burdens are gone, he’s started attending business and communications courses at the University of South Florida in Tampa.
‘This Was Completely Unexpected’
Lawrence no longer feels boxed in financially. He has enough credit for anything he needs, he’s been able to pay off his credit balances, and it’s felt seamless, practically automated.
He has bought computers and gear for his garage, so he can work on vehicles the way he likes.
He just bought a high end 2018 MacBook, and he used his credit card to do it. “I was able to put it on my credit card,” Lawrence says. “I’m like, ‘Hey, I can factor this into my budget.’”
Lawrence praises Debitize for helping him with three things. First, he lowered his debt. Second, he improved his credit.
“The third thing, which was completely unexpected to me, was this: Debitize has really taught me how to manage and save my money better, you know?”
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Jeff Goldbloom
Jeff is happily married to his wife Amy and they have two beautiful daughters. When Jeff isn't writing and editing financial columns, he enjoys fishing on Lake Travis in Austin, Texas.
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