By Rod Ebrahimi, CEO of ReadyForZero
Credit cards can be a great tool for people who want to build credit, earn rewards, and have a convenient way of paying for purchases. However, they can also be a weapon of self-destruction if they get into the wrong hands — and in this case, the wrong hands means anyone who’s unable to pay off their balances at the end of each month and is trapped in a cycle of debt, hurting their long-term financial future.
When Americans have about $7,120 of credit card debt per household on average, it’s a good sign that there’s a problem and it’s time for someone to try to solve it. That’s what my co-founder and I agreed when we decided to start ReadyForZero, a small company with a big goal: to rid the world of debt.
What started as a two-person company in 2010 has grown much larger, with users all across the U.S. who are paying off their debt using our free online financial tools and optional premium services like payment automation and credit management. We realize that helping everyone pay off their debt and take greater control over their finances will not happen overnight, but we’ve been excited by our progress. Our initial vision was to create a web app that organizes and optimizes what you owe (credit cards, student loans, etc.) in one place – automatically. Each person’s plan, we knew, would have to be based upon paying down the highest interest rate account first and then moving on to the second-highest rate, and so on.
But we also knew that credit cards subtly encourage spending because they make it so easy to make purchases, so we wanted to incorporate psychological triggers that would get people going in the right direction – that is, out of debt – instead of getting deeper in debt. An example of one trigger we included in the site is an “accountability email” that gets sent to the friend or family member of your choice on a regular basis. We also send deposit alerts to encourage making extra payments to high interest debts.
Thanks to these unique real-world-based ideas and the dire need for such a tool, we’ve had really positive responses ever since the very beginning. We’ve been able to profile many of our successful users on our blog, and they’ve explained how ReadyForZero helped them get out of debt. And in the aggregate, the amount of debt we’ve helped our users pay down has just recently crossed over the $75 million threshold — that is, $75 million in debt paid down by people using the ReadyForZero platform.
The pain of consumer debt is still one that is widely felt by individuals and families all over the U.S., with levels of credit card debt remaining fairly steady in recent years. Since the global financial crisis of 2008, people have become more eager to pay off their debt, but of course it’s a process that can take many years. If tools like ours can gain wider adoption amongst the general public, there is no doubt it will hasten the day when everyone in the U.S. is able to say “I am debt free.”