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By Laura Tiffany

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Mohnish Pabrai reached an impasse in his corporate career in1990. As a single guy with few fiscal responsibilities, it seemedthe best time to start his own business. He collected $45,000 incredit on 14 credit cards and started TransTech Inc., an ITconsulting firm in Downers Grove, Illinois.

After two years in business, Pabrai had clients--but no cashflow. To keep his tech venture going, he dove deeper into debt byconvincing four friends to lend him $5,000 each from theircredit cards. "And they were insane enough to do it,"jokes Pabrai, 34. "When minimum payments came due, I would goto the next card and take a loan. I never missed a payment, sothere were never any credit [problems]."

Pabrai's gamble paid off: He cleared his debts, and today,TransTech is a $30 million company with 250 employees. But not allentrepreneurs are so lucky. Credit cards may be the easiestattainable form of financing, but they come with a price: heftyinterest rates, dozens of bills to juggle, and a possible 10-yearpurgatory of bad credit reports if you get in over your head.

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