Ditching debt

These days it seems as if everybody has debt: consumers, corporations, and especially the government. But these seven business owners are determined to become debt-free. They are ditching credit cards and giving their bank loans the old heave-ho.

No more credit cards!
No more credit cards!
Susan Tellem (center) with sons and co-owners John and Dan, daughter Tori and husband Marshall.
Company: Tellem Grody Public Relations
Owner: Susan M. Tellem
Headquarters: Los Angeles

When I sold my first public relations business, I made some stupid mistakes, like buying a house that was too expensive. So I didn't have a lot of extra left to start my second business.

In 1992, I went to work with the largest PR agency in the world for six months as one of their top executives in Los Angeles to make some money. I am an entrepreneur at heart, so that did not work. I left after a year and started my second business.

I had my business contacts and already had the infrastructure -- a computer and a phone.

A few years later, when I started to build my company and do fairly well, I applied for a line of credit for $25,000 at the bank. I hated having that over my head. I asked them to close it when I still owed $12,000. I also maxed out our company credit card to the tune of about $12,000.

Today, I am happy to say that I've paid off most of that loan and credit card debt. I owe about $2,100. I don't use credit cards. That is it. Once you start accumulating credit like that, there is no going back.

We have made a vow to live within our means. I am tired of paying the ridiculously high interest rates. I figure if I don't have any debt, we're ahead of the game.

I have never missed a payroll in my entire life, and I never intend too. But if something happens, I have an equity line on my home. I absolutely do not want to dip into it. But, I always have that as a backup.

Still, reliance on credit or loans can ruin a small business. You're not living within your means.


As told to Catherine Clifford - Last updated October 17 2011: 4:34 PM ET
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