Funding dreams on credit: Vintage arcades
Part 5: Michael, Michelle Ware inserted cards into their gaming business
Dreamers: Michelle and Michael Ware
The dream: Starting a business making vintage arcade games
How they used credit
cards: Paid for business and household expenses on their lowest-interest
credit card while getting their business started. They maxed the card out at
$25,000 and also took a $10,000 personal loan.
How they paid off the
debt: They paid only the minimum amount due until the business took off,
then began working to pay off the balance. They got out of debt three years
after starting the business.
Advice for others: "If
you plan to leave your job to start a business, open a credit card before you
leave," Michael says. "I always tell people, 'Get a credit card now because
you're not going to be able to get one later.'"
The back story: The dream started when Michael built a 1980s-style
arcade for his wife, Michelle, so she could play Ms. Pac-Man. Then friends and
co-workers began putting in orders. "People thought it was really cool - they
wanted to play all their old favorite games," Michael says.
In 2004, when Michael found out he might get laid off from his
job at Intel, he decided to launch his dream business. "Michelle said, 'You can
go ahead and try this, but I don't want to put the house at risk,'" Michael
Before he left his job, the Wares got two credit cards with
high limits and a personal loan for $10,000. "I made sure we had a lot of
cushion," he says. "Credit cards gave us the flexibility to borrow what we
They began making a profit, and slowly started paying down
their debt. When they began getting the arcade cabinets manufactured, Michael
had to make a trip to China and they had to pay $40,000 to order an entire
container-load of cabinets.
Today, the Wares have six employees. They have paid off
their debt and have swapped out their lower-interest cards for rewards cards.
They make most of their purchases on rewards cards, pay them off each month and
use the points and miles to take a vacation to Hawaii each year.
They're happy they used plastic to start their business:
"For us, it was a matter of balancing the risks with the rewards," Michelle
See related: Main story: 5 who funded their dreams on credit,
Q&A: How business startup nailed down credit card debt
Published: March 19, 2013