The "frozen credit card method."

My wife discovered it three weeks later while looking for frozen edamame.

"Why is our credit card... frozen? Literally frozen?"

"It's a commitment device," I explained, pulling out my phone to show her the math. "If I want to use it, I have to wait for it to thaw. That gives me time to think about whether it's really an emergency."

Last March, I experienced something that made me close my laptop and walk around our Tokyo apartment for 20 minutes in silence, with Lily sleeping peacefully in her crib nearby.

My entire monthly salary had gone to paying off the previous month's credit card balance. Not a single yen remained for the current month.

I was literally one unexpected expense away from debt. One medical bill, one emergency flight, one broken appliance - and I'd be carrying a balance at 15% APR while earning 0.23% on savings.

The math was terrifying: ¥0 buffer against interest rates that cost 65 times more than my savings account earned.

That night taught me the most expensive lesson about credit card rewards: the points people enjoy often come from someone else paying interest.

Here's what the financial blogs won't tell you about chasing points in Japan: the mathematical foundation has to come first.

Table of Contents

• With my credit card in the freezer, this is what h …

• But What If You're Already In?

• Option 2: Debt Avalanche Method

  • The Personal Loan Option for Debt Conslidation

  • You need an emergency fund first!

  • The Resource Hunt

• The Freedom Math

For high earners annually, this creates a deceptive confidence trap. High income makes the monthly payments feel manageable - until they consume your entire cashflow.

Let me show you exactly what I calculated that March evening:

My Dangerous Position:
- Monthly salary: ¥500,000
- Credit card payment: ¥500,000
- Emergency fund: ¥0
- Buffer for current month: ¥0

The Hidden Cost: If I'd carried just ¥200,000 for one month at 15% APR:
- Interest charge: ¥2,500 for one month
- Meanwhile, ¥200,000 in savings earns: ¥400 per year (0.2%)
- Cost ratio: 75 times more expensive than savings earnings

Let’s say I wanted to buy a new laptop: ¥200,000 laptop financed over 24 months:
- Total cost: ¥232,000 (¥32,000 in interest)
- Same amount in savings for 2 years: ¥800 earned
- Net opportunity cost: ¥32,800 difference

The 20-Year Devastation: If that ¥200,000 was invested instead of paying credit card interest:
- Conservative 4% annual return: ¥438,219
- Aggressive 7% annual return: ¥774,339
- Lost wealth: ¥238,219 to ¥574,339

In Japan, credit card debt isn't just expensive - it's wealth destruction that compounds over decades.

With my credit card in the freezer, this is what happened. 

But here's what happened over the next eight months:
- Month 1: Salary ¥500,000 expenses ¥450,000 (cash only)
- Month 2: Salary ¥500,000, expenses ¥400,000
- Month 3: Salary ¥500,000, expenses ¥380,000

By forcing myself to use cash and debit only, I discovered something profound: I had been unconsciously treating credit cards as extra money rather than borrowed money.

The psychological shift was immediate. Every purchase became a conscious decision. No more convenience store runs that somehow totaled ¥1,800. No more "I'll just grab this and figure it out later."

Eight months later, we were debt-free with ¥650,000 in emergency savings.

The frozen credit card never thawed. We threw it away when we moved to our new house.

But What If You're Already In?

I was lucky. I caught myself before falling completely into the debt trap. But what if you're already in the hole?

Let's call him Takeshi—an engineer in Shibuya making ¥520,000 per month. Smart guy, good job, but somehow he's ¥480,000 deep across three credit cards and has been making minimum payments for 18 months.

Sound familiar?

Takeshi's story isn't mine, but it could have been. And if you're reading this with your own credit card balances in mind, it might be yours too.

Takeshi's 2am Revelation

Takeshi's breaking point came during Golden Week 2024. While his friends were posting Instagram stories from Okinawa, he was at home with a spreadsheet, finally facing the numbers he'd been avoiding.

The math was brutal:

Takeshi's Credit Card Situation

- Rakuten Card: ¥210,000 at 16.37% APR → ¥2,866/month minimum
- EPOS Card: ¥170,000 at 15% APR → ¥2,125/month minimum
- JCB Card: ¥100,000 at 12% APR → ¥1,200/month minimum

Total debt: ¥480,000
Monthly minimums: ¥6,191
Monthly interest: ¥5,949

He was paying ¥6,191 every month, but ¥5,949 of that was pure interest. Only ¥242 was actually reducing his debt.

At this rate, it would take him 47 years to pay off his cards. Total cost: ¥1,387,000.

The revelation that made him close his laptop and walk around his apartment for 20 minutes: His bank balance was earning 0.2% annually. Meanwhile, his credit card debt was costing him the equivalent of a 1,642% annual interest rate when compared to what he could earn.

He was effectively paying ¥5,949 per month for the privilege of keeping ¥145,000 in savings that earned him ¥36 per month.

Takeshi realized he wasn't just fighting debt—he was fighting a system designed to keep him borrowing while cultural barriers made it harder to seek help.

The Math That Changed Takeshi's Mind

Takeshi spent his entire Golden Week building a spreadsheet. Here's what he discovered:

Option 1: Minimum Payments Forever
- Timeline: 47 years
- Total paid: ¥1,387,000
- Interest paid: ¥907,000

Option 2: Debt Avalanche Method

Target highest-rate debt first while maintaining minimums on others:

Phase 1: Kill the Rakuten Card (16.37% APR)
- Extra ¥50,000/month to Rakuten Card
- Timeline: 4 months to eliminate ¥210,000 balance
- Interest saved: ¥6,869 vs. minimum payments

Phase 2: Attack EPOS Card (15% APR)
- Redirect ¥50,000 + ¥2,866 (freed from Rakuten) = ¥52,866/month
- Timeline: 3 months to eliminate ¥170,000 balance
- Interest saved: ¥4,250

Phase 3: Finish JCB Card (12% APR)
- Apply ¥54,991/month (¥50,000 + ¥52,866 freed up)
- Timeline: 2 months to eliminate ¥100,000 balance
- Interest saved: ¥1,000

Total debt elimination timeline: 9 months
Total interest saved: ¥480,119

But then Takeshi discovered something that made him reconsider everything.

The Personal Loan Option for Debt Conslidation

Research revealed that SMBC offered personal loans at 6.9% APR for debt consolidation. Running the numbers:

The consolidation loan would save him an additional ¥432,679 over the avalanche method. This is an attempt to pay off the higher interest loans and consolidate to a single loan and ideally lower interest rate to may paying off the debt easier.

But here's where Takeshi's story gets interesting—and where his research revealed the most important principle of all.

You need an emergency fund first!

As Takeshi prepared to apply for the consolidation loan, he stumbled across an article about emergency funds. The author argued that even people in debt should maintain a small emergency buffer before aggressive paydown.

This seemed counterintuitive. Why keep money earning 0.3% while paying 16.37% on debt?

Then Takeshi imagined a scenario: What if his employer had a cash flow crisis and delayed salaries by two months? Without any buffer, he'd be forced to use credit cards for basic expenses, potentially adding ¥300,000+ to his debt overnight.

Safety Buffer Strategy

- Emergency fund: ¥200,000 (minimum survival amount)
- Debt payment: ¥30,000/month instead of ¥50,000
- Timeline: 13 months instead of 9 months
- Extra interest cost: ¥28,000
- Peace of mind: Priceless

The Resource Hunt

Takeshi's research revealed a network of resources most Tokyo professionals don't know about:

Professional Help (Japanese/English)

- Japan Consumer Credit Association (JCCO): 0570-051-051
- Founded 1987, free consultations
- Debt management plans and negotiation services

- Houterasu (Legal Aid): English support available 0570-078377
- Government-funded legal assistance
- Debt consolidation and bankruptcy guidance

The Freedom Math

Here's what getting out of credit card debt actually means for your family in Tokyo:

Immediate Financial Relief:

- Every ¥100,000 of debt eliminated = ¥15,000/year back in your pocket (at 15% APR)

Long-term Wealth Acceleration:

- ¥300,000 debt elimination + investment instead = ¥2.1 million over 20 years
- The difference between paying banks and building generational wealth

Psychological Freedom:

- No more 3 AM anxiety about minimum payments
- Credit cards become tools for rewards, not survival mechanisms
- Family planning conversations focus on opportunities, not constraints

The Reality Check: What Should You Do Right Now?

If you're thinking "this all makes sense, but where do I actually start?" - you're in the right place.

If you have credit card debt today:
1. This week: Calculate your exact debt total and minimum payments
2. Next week: Research debt consolidation rates (start with your main bank)
3. This month: Choose avalanche vs. snowball method and commit to one approach

If you're debt-free but living paycheck to paycheck:

1. This week: Build that emergency fund foundation (even ¥10,000 is a start)
2. Next month: Set up automatic transfers before you can spend the money
3. This quarter: Once foundation is solid, optimize rewards confidently

Hit reply and tell me your situation. Are you dealing with multiple card balances? Considering a consolidation loan? Trying to build emergency fund while carrying debt? I read every response and often turn reader questions into future newsletter deep-dives and will help you navigate your circumstance.

Your future self will thank you for taking action this week instead of waiting for the "perfect" plan.

This content is educational only, sharing personal experiences and research. Not personalized financial advice. Consult qualified professionals for your specific situation.

Stay Wealthy

Jason

Building wealth for English-speaking permanent residents in Japan, one story at a time.

P.S. The frozen credit card method sounds crazy, but the psychology works. Sometimes the best financial tools are the simplest ones. Try it for 30 days and see what happens to your spending awareness.

P.P.S Apologies for missing last week!