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Living with credit, Protecting yourself

Burn your credit cards?

Connie Prater

“You’ve got to burn the credit cards.”

So says Jim Cramer, the wacky and outrageous host of CNBC’s “Mad Money” finance television show. He was a guest on the “Jimmy Kimmel Live” late show Feb. 27, 2008, promoting his new book “Stay Mad for Life.”

A Harvard graduate and former newspaper reporter and hedge fund manager, Cramer gives his take (often shouting it) on the latest Wall Street moves and developments on his daily show. He’s a lightning rod for controversy. He told Kimmel about criticism he got from real estate agents because he told viewers not to buy real estate right now: “I guaranteed you’d lose money if you buy a house.”

Kimmel, who introduced his guest as “the very unstable Jim Cramer,” asked about the book: “If people, Jim, buy this book, what is the main thing that they are going to learn…?”

Without skipping a beat, Cramer launched into a response that surely made more than a few bank executives cringe:

“They’ve got to burn their credit cards,” Cramer said. “They’ve got to go to their credit card companies and say, ‘Listen pal…’  You’ve got to call them. They don’t want you to default. This is a big secret, OK. They’re going to hate me for this. So you call them and say, ‘Listen man, I’m in a jam here. I cannot afford to pay. I’m going to put all my cards together under one credit card — called snowballing. You don’t want Cramer and all those other guys on Wall Street to think that people are defaulting. I need a break. I need to stretch out the terms.’ They will do it.”

Kimmel appeared surprised. “Really?” he asked.

“Yes,” Cramer said. “You’ve got to stop being poor before you can get rich. They’ll do it. They will listen to reason. They will listen to you.

“Tell ’em I said it,” added Cramer, who went on to say he’d be willing to “co-sign those phone calls.”

So how about it folks? Want to call up your credit card companies and give them the Jim Cramer treatment? Think he’ll “co-sign” if you end up defaulting on the account?

It seems you should also be asking the credit card companies to lower your interest rate. Simply stretching out the terms means you pay for longer periods, right?

I guess you have to buy the book to find out exactly how this works.

Let us know if you’re successful.

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  • Graeme Dey

    Thanks for the honesty, to save us (consumers) from making mistakes with credit cards.

  • garhead

    I tried that method with AmEx after going through some personal crisis, stayed in contact, paid as much as i could still got slapped with late charges on top of late charges and adding insult to injury after the second month they doubled my interest rate to 29.9% and demanded not only the past due amount but the entire balance in full, then they abruptly turned everything over to collection agency

  • TMiller

    This article made me think why do I have so many credit cards (about 10 major cards) when I carry no balances on any of them. Especially in this day of identity fraud. Even though I know better than to carry a balance on a card, it is easy to have credit card creep because one card may provide some benefit that would be cool (rebate on the gas you buy, etc.). So I agree, burn “most” of your cards and keep a couple that sends you a check now and then. Just is case, make sure the one of the cards you keep charges “relatively” low interest in case you run into that rainy day.

  • Connie Prater

    Read the blog called “Food for thought about closing a credit card account” http://blogs.creditcards.com/2007/11/food-for-thought-on-closing-a.php before you burn the cards. It could impact your credit score, which comes into play if you’re planning to take out a loan anytime soon.