If you're struggling with debt, clearly you're not alone. Being debt-free takes resolve and a little know-how. We'll help you get on the right track, starting with these seven steps.
Step 1: Separate "Bad Debt" and "Okay Debt"
How can you tell the difference? "Okay debt" has an interest rate under 10 percent -- preferably with tax advantages to boot. In the best-case scenario, the thing you bought with borrowed funds will appreciate in value (think mortgage and even that student loan). "Bad debt" is everything else -- especially credit card debt.
Step 2: Don't Pay by Their Rules
The "minimum amount due" is cleverly calculated to keep you beholden to The Man for your entire adult life. A $4,500 balance on a card with an 11-percent APR will take 44 years to pay off, even if you don't put another dime on the card. Oh, and the interest you'll pay on that loan? A whopping $17,000! That's why you're going to pay by your rules. Keep reading.
Step 3: Get Intimate With Your Visa
Gather your bills and clear a space at the kitchen table to line them up. Rank your cards from the lowest to the highest interest rate. Identify the one major credit card with the lowest annual interest rate and room for a balance transfer. See which high-interest rate cards you can phase out of your life and move to the low-interest card.
Step 4: Play the Heavy With Your Existing Lenders
Grab a bill from any account charging you more than 14-percent interest and ask to have your rate lowered to 11 percent. Say you've received offers for much lower-rate cards. Your lender would rather keep you as a customer than pay $50 to $200 to find your replacement. Plus, studies show that more than half of the customers who tried to negotiate lower interest rates had some success.
62762726 
brunoshort
RE: TheBenonas I have the same problem. My hubby's cards have gone from 18% to over 30%. The card companies told him that they could do nothing for him and had the audacity to tell him to either pay it off and not deal with the increase or to keep making the minimum payment and wished him luck. He's had these cards since around the same time as you (2003), has never missed a payment or been late on one. They practically gave him the go ahead on defaulting.
62696627 
nikkimoon
Absolutely! Dave Ramsey is the best, look him up. get his book Total Money Make Over... there are people in his book that were in a million times deeper then me and worked it out... it totally gave me hope- if these guys can be so f'ed and do it- i can do it!
62693105 
old_time_girl
Look up Dave Ramsey. He has the best salutions for paying down debt. And don't worry about your credit score. When you can pay cash for everything, you don't need it. :-)
60962439 
maf1264
I have read that you do not cancel a credit card after paying it off. Sure you may be mad at them (b/c they are evil! lol) but keeping the card open and using it wisely (buying something that you CAN pay off when the bill comes) will help your credit score. By cancelling, you lessen your credit available, lowering your score.
60933030 
TheBenonas
i tried talking down my interest rate (they just raised it to 23% and I dont know why i been paying more than the minimum for months now) with one card and they said they cant do it. I called 3 of my cards and they said they cant do it. I been with one credit card company since 2003 and I would think they would do it to keep their clients around. Whatever, Im almost done paying it off. I got about $1,000 left. Then ill cancel it.
59386235 
alana81584
I called my credit card company (my only credit card company) who recently sent me a statement saying if I was late more than twice in a 12 mo. period, my interest rate would jump to 29%. They gave me a credit but said there was no way to lower the interest rate (now at 23%). I just paid them off the majority of the card. I left a little on to make minimum payments to help rebuild my credit. They said to call back in a few months to try to lower the interst rate. So, I'm going to pay off the rest of the balance now, since I have the money. Maybe since they'll only be getting one payment from me rather than extending it out and collecting interest, they'll change their mind, and lower the rate. It's like robbery. As long as I have my card, I'll always have someone picking my pocket.
59347782 58419858 
rmathis7903
I agree with JakesBride. I've been paying down debt this way for the past year, and was able to successfully get rid of 6 credit cards!! It made me feel like i've accomplished something and am motivated to keep doing more. And because i now have zero balance on those cards, i've been getting offers for low rate balance transfers, and if played right, they can REALLY help you dig more into your debt. I got a rate of 1.8% on my balance transfer and paid it off within three months. be carfeul tho, if you miss a payment on a balance transfer, they can add in all you accumulated interest from day one of the transfer. So set up auto payments and pay those of quickly!!
58214093 
Knechts
I disagree, M2M, I just (over the weekend) contacted my credit card company about a card that had an interest rate of 23%! I called to see if they could lower it. Initially, they were going to lower it to 16.9, then, I talked them down to 14.9, by the end of the call, my interest rate was down to 12.9!! I couldn't believe it. They cut my interest rate in half!
57662064 
JakesBride07
This is absolutly great advice. HOWEVER!!!!! for those of us who seem very overwhelmed...I got some great advice from my finianical advisor and then again from a friend. You may pay a bit more in intrest on the larger debts but it will keep you motivated: pay off your smaller debts first and then roll the amount you were paying to the smaller debt to the next one in addition to the minimum payment. You'll be amazed how quickly debt will disappear. And you'll feel more accomplished and less likely to give up.
57590549 
vwbunnygirl
Kittenkiss18 it is a good idea IF you can get a better rate BUT beware balance transfer fees and make sure to pay the min due on each credit card if the transaction hasn't posted yet. The low "teaser" rates to get to to balance transfer are only good as long as you are making on time payment for ALL your debts - miss a payment on something else and your APR can shoot up and be sure to know when the special lower rate ends
57568216 
M2Mrokz
In today's world, you cannot get a APR reduced by that much. The best thing to do is listen to the old saying, "emergency only". I have been doing that and I see my balances getting smaller little by little.
56969710 
kittenkiss18
Would it be smart to pay off other cards with one card? That way there would only be one card to have to make monthly payments on.
56613097 
K_NOONAN_KANDA
These are all such good tips, especially tip #8. I set up automatic payments each month for my credit card to pay off the debt without ever missing the money. Unfortunately, I've been through this cycle of accumulating debt, then paying it all off, then accumulating it a few times. Hopefully this time it will stick! Here are some more tips I found that I'm following:http://www.youngmoneytalks.com/blog/inde
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