When I met Randall Blaum during a unique “Getting To Know You” exercise at Marshall Thurber’s introductory program for “positive deviants” (See Networking Times, Nov/Dec 2007 issue), I immediately liked him—as did the other fifty participants. Thurber challenged us to decide “who you would want on your team if your business was in trouble.” Using a speed dating model, we spent less than one minute interviewing every participant. Randall Blaum emerged as the clear #1 pick in that program. I was delighted to get to know Randall better through this interview and confirm my initial impression of his competence and heart for service.

While Randall’s business, Marketing Experts International, works with Fortune 100 clients such as American Express, Coca-Cola, Disney and Starbucks, his heart serves individuals who, in search of the good life, find themselves on a path of financial destruction: the downward spiral of growing credit card debt.

Randall knows this path, because he’s been down it. After a highly successful career as a promoter in the film business, he succumbed to the addiction of consumerism and found himself in serious debt. Twenty years and two bankruptcies later, he discovered a way to get out of debt—and stay out forever.

Passionate about what he had learned, Randall launched a crusade to educate others in hopes that he might spare them the kind of suffering he had experienced. Now having created millions of dollars in revenue for himself and his clients, Randall offers his credit card debt strategy manual for free. He tells his rags-to-riches story and life lessons with compassionate humor to audiences across the country and being in network marketing himself, he was thrilled to share it with his fellow networkers.

Randall, you’ve been called “America’s Dump Your Debt Expert.” How did you acquire such expertise?

Although it’s hard to imagine, because of my financial success today, about twenty years ago I owed $50,000 in credit card debt. I was living the high life. I not only kept up with the Joneses, I bypassed them. It was a lot of fun—until mounting debt snuck up on me.

It happened very slowly. You start by going out to dinner, getting your laundry dry-cleaned, buying that fabulous pair of designer jeans. Credit cards were a convenience. Besides, I thought, “It’s only $20 a month.” When I maxed out the first card, the next one was “only $15 a month.” I didn’t realize it, but I was addicted. Before I knew it I had three cards, five cards, ten cards and those it’s onlys added up to hundreds of dollars a month.

How did I become the expert? I was so deep in debt that I simple had to learn how to dump my debt in order to survive.

Didn’t you know that you were spending more than you made?

Yes, but it’s strange—somehow I ignored that piece of the puzzle. I imagine it’s like people who are heavy smokers.

“Haven’t you heard that smoking is bad for your health?”

“Yes, I have.”

“Then why don’t you quit?”

“I don’t know.”

Maybe it’s just part of the human condition. I was easily able to ignore the fact that I was spending more money than I made. Suddenly, no matter how hard I worked, no matter how much I made, I couldn’t pay my bills. It was downright frightening. I had about twenty credit cards all maxed out, plus I had my regular living expenses.

What did you do?

Night after sleepless night, I would pray that the sun would never rise. I couldn’t face the endless calls from bill collectors. I avoided my mailbox. I tried to hide by moving to seven different states. But you know what, Marian? It never goes away.

It is not easy to admit how deeply in debt I was, and I can hardly believe that I now stand before huge audiences and say, “Here I am, with all my faults. Here’s how I got into debt…and here’s how I found the way out.” I am determined to help people avoid the pain I went through. There’s just no reason for anyone to suffer the way I did.

Randall with Director of Photography Bryan Swobda for movie U R Pre-Approved in Washington, D.C.
Is that why you created the film, U R Pre-Approved?

Why else would I take on the task of directing a film on credit card debt? Quite frankly, can you think of a less exciting subject than credit card debt?

Perhaps because of my passion, and certainly because of the exceptional team of producers, Brad Dugdale, Grant Smith and David Scotland, we were able to create a movie that educates and entertains. In addition to showing people how they get into and out of debt, we expose how credit card giants have manipulated the law, as well as American politicians and consumers.

Are you suggesting that we not use credit cards?

Not at all. Let’s be practical. While I suppose it’s possible to live life without a credit card, have you ever tried to check into a hotel or rent a car without one? Credit cards are not inherently bad; they are a convenience and as such they are neutral.

After your experience as a “credit card addict,” do you still use credit cards?

Yes, I do. I have one for personal use, one for business, and one for emergencies. The difference is not whether I have cards, but how I use them and pay them off. I no longer feel the need to impress anyone (including myself) with what I own. Although I can afford whatever I want today, I paid only $199 for my twenty-inch tube TV. It suits me fine, and I’m not concerned that people might think less of me because I don’t have a plasma screen TV. I’m now more in tune with who I am, rather than what I own.

Secondly, my post-debt plan has been to pay off any credit card loans within ninety days. If I need a $5,000 widget for my business, I give myself up to ninety days to pay it off. If it costs me $100 in interest, I figure that into the cost. Of course I’ve learned how to make credit work for me, so when possible, I use 0 percent interest cards.

So your advice is to pay off credit cards within ninety days and use cards with the lowest possible interest rates?

Yes, but there’s a catch. No matter what the credit card marketing material says, if you read the fine print in the middle of the disclosure statement, it may say something like this, “We reserve the right to change your rate at any time for any reason, including no reason.” So if you think you just got a credit card for 0 percent forever, you’re fooling yourself.

Let’s be real. If your internal sensor knows you can pay off your card in thirty to ninety days because you’ve got money coming in, by all means use a credit card. Even a 30 percent annual interest rate for just one month won’t be too much. But if you’re lying to yourself and you don’t know when you can pay it back, you’re asking for trouble. You can learn the cost of borrowing money by using one of the free online interest calculators (see p. 42).

Can you show us an example of how an interest calculator works?

Sure. Let’s assume you have a brand new credit card with a $1,000 limit and a zero balance. Let’s say you’re going to spend the whole $1,000 buying products and marketing materials. Type in $1,000. Then enter your interest rate, let’s say 18 percent, which is around the national credit card average.

If you’re thinking you’ll make the minimum payment, that might be about $20 per month. So type in $20 a month, and the calculator will show you how many months or years it will take to pay it off. Change the amount you’ll pay per month and watch how that affects the period in which you will be able to pay it off.


Are certain types of people more prone to credit card debt than others?

Absolutely. First let’s take a look at the big picture: Americans are more than $900 billion in credit card debt right now, and the average American household carries more than $9,300 in credit card debt.

Recently, I read on ABCNews.com, “Congra-tulations! If you make $40,000 a year, you are one of the top income earners in the country.” I was stunned. I’m not making any judgments about earning $40,000 a year, however it is obvious that these earnings are not enough for most people to cope with the average credit card debt most everyone carries.

So who are the people in debt, and why are they in debt? On one end of the scale are senior citizens. Just one generation ago, senior citizens paid for everything in cash and followed society’s norm, “If you can’t afford it, don’t buy it.” Today, because the cost of basics is rising, senior citizens are facing massive credit card debt for the first time in our country’s history.

Then there’s the nuclear family, who is under tremendous peer pressure: “Does Bobbie have the newest Xbox? Is Sue wearing the latest designer clothes? If not, what does that say about our family?” Living for external approval can be expensive as well as deeply unsatisfying.

The third at-risk group for credit card debt are our young adults. When turning eighteen, a youngster can apply for credit cards with limits of thousands of dollars without the parents even knowing about it. It’s scary. Right next to the table at the college campuses where our children register for courses is a table with a credit card dealer, pushing credit cards on our children!

Teens entering college may not be financially savvy. They may not realize that the $100 they blow on a pizza and beer party could cost them much more than $100 if they charge it to their credit card. That’s why we show real teen and young adult credit debt stories in the film, U R Pre-Approved.

Our seventeen-year-old was captivated by the film.

I’m glad to hear that! We designed the film to appeal to both young and old. For the young, we have cool skits and real stories of youth in trouble. For business folks, we showcase experts such as Elizabeth Warren, professor at Harvard Law School and author of numerous books on the topic, including As We Forgive Our Debtors: Bankruptcy and Consumer Law in America.

Randall, what about people who are starting a home-based business? Isn’t it sometimes necessary to go into debt to take steps towards creating wealth?

No doubt about it. It’s how Donald Trump builds his buildings. It’s how Oprah built the Harpo Empire. Based on the research I’ve done and in my own experience as a network marketer, about 70 percent of all network marketers carry a balance on their credit cards. I don’t know any entrepreneurs who haven’t at some point put at least part of their business expenses on a credit card, fully aware that at that particular moment they couldn’t afford to pay it off.

Entrepreneurs seem DNA-coded to take a slightly higher risk than the norm. The big question you have to ask yourself—and you’ve got to be honest about it—is, what if the worst case scenario happens? If you don’t see any revenue from your network marketing business for the first ninety days, do you have enough money coming in to support you? Most savvy entrepreneurs will have a solid plan for generating money before they spend it.

On the other hand, a network marketing business can become successful without spending much money, if any, other than on products for your own personal consumption.

That’s true. Great network marketers are so passionate about their product or service that they talk about it with genuine enthusiasm. And talk is free. Other than your own product purchases, you don’t have to carry inventory, you don’t have to buy 50,000 tri-fold brochures, you don’t have to create a $10,000 website. Most of these are done for you as part of belonging to the network, either for free or for a nominal fee.

For those who didn’t get your advice for staying out of debt, what’s your advice for getting out of debt?

Follow this three-step process:

First, get rid of temptation. If you took an alcoholic to a bar every single day for months, what do you think the chances are that at some point he or she would have a drink? Probably pretty high. Get yourself on a government do-not-mail list directed at credit card and insurance companies. Here’s how: call 1-888-5OPTOUT. You can stop those insidious “You Are Pre-Approved” mailings.

Second, reduce access to your own credit. Let’s say you have three VISA cards. Carry only one of them in your wallet at any time. If you’ve got a $1,000 limit, and you’re at $500 when you see a new jacket at Nordstrom’s, you might not get it because it’s all you have with you.

The third step is to pay more than the minimum payment, even if it’s only a dollar. As you start to act on reducing your debt, you actually form new synapses, rewiring your brain to think, “I’m getting out of debt” instead of “I’m always in debt.” This is an important piece of the puzzle. Paying more than your minimum payments creates a snowball effect. By reducing the principal, you lower the amount of interest you’ll be charged. Then, when you get one credit card paid off, add the amount you were paying on that card to your regular payment for card number two. This way you “snowball” your payments and reduce your debt more quickly.

Also, let your family support you in getting out of debt. I know it’s tough to stand up and say, “I don’t know how I got here and I don’t know what to do.” But if you don’t, when you’re a grandparent witnessing the debt cycle hurting your children, you’ll say, “I wish I had done something about it thirty years ago.”

As parents, we are responsible for teaching our children financial literacy. As networking leaders, should we be responsible for teaching financial literacy to our new business associates?

I think it’s essential for networking leaders not just to sell a path to financial freedom and then stay in touch via auto responders, but to offer information about how to understand and manage finances. This may sound like a lot of work: (“Just because I’m Mary Jane’s upline, now I have to teach her how to balance her checkbook?!”), but it’s really a win all around. If your downline can keep ordering products and doesn’t have to drop out because they’re over their heads in debt, what’s that worth to you and your business? How much more rewarding is this way of building an organization? It is essential that networking leaders do not create debt slaves at the same time they are building new leaders.

Do you recommend any tools to help us help our downlines?

Absolutely. My passion for helping people get out and stay out of debt has led me to create a free tool called Dump It! A Debt Reduction Quick Start Guide (available at www.DumpDebtGrowWealth.com). Helping people earn financial independence through network marketing and debt-reduction work hand-in-hand. Both are designed to help people enjoy a better life.

Any final thoughts for networking professionals who are on the road to financial freedom?

Because of today’s rising prices, some people are forced to go into credit card debt in order to feed their families. Others find themselves in debt after suffering a major illness, losing a job or getting a divorce. Using the “plastic safety net” sometimes seems unavoidable. But going into debt in order to impress your friends and family with the things that you do and own is avoidable. I know; I was there.

When I look back on how I got into massive debt, I can see that it really came from running away from myself. We must be more diligent in educating our younger generations—and our downlines—about one of the fundamental aspects of financial freedom: learning to be happy not because of what we own, but because of who we are inside.