Debt Help

If your credit-card balance has crept up to uncomfortable levels, you're not alone. Millions of Americans have learned -- the hard way -- how easy it is to use and abuse their credit cards and how difficult it can be to pay them off.

We offer these credit-card debt elimination tips:

Always be aware of all of the fees that may be associated with your credit card. (That means not tossing out the fine-print leaflets that come in your bill periodically!) Know the annual fees, current interest rates, finance charges, cash-advance fees and any other fees tied in with your card. This knowledge can help you make better decisions on how to manage your card.

Cash advances can be trouble! You should only get cash advances when it is absolutely necessary. Higher interest rates (than you're paying for card purchases) are usually charged, and most banks also charge a service fee related to how much cash you're withdrawing. (The same applies to those handy, personalized "checks" the credit-card company sends you!)

Always be on the look-out for cards that offer lower interest rates. Transferring balances from one card to another to take advantage of low introductory rates is a common practice among U.S. cardholders. Low introductory rates can be very helpful in your quest to become free of credit-card debt. You should look for credit cards that offer a low intro rate (usually for six months), and transfer the balance from your previous credit card to that credit card. Before you take this step, however, make sure that, after the intro rate has expired, the new card offers the same (or lower) interest rate as your current card.

Experts say that making minimum payments is one of the most common mistakes consumers make. You will save lots of money on interest and get to debt-free goals sooner if you pay more than what is required each month.

It's true that it's really easy to fall into the credit-card trap, and not so easy to get out. But don't give up -- there are non-profit centers across the country that will provide counseling to you and will even (at no or low charge) contact your credit-card company and try to get your rate lowered or a different payment plan worked out.

You can dig yourself out of debt and stay out of debt by sticking to a monthly budget. Keep the following tips in mind when developing a workable budget for your family.

1. Put away all of your credit cards. Try to pay for purchases with cash or checks until your credit card balances are paid in full.

2. Determine the total amount you owe creditors.

3. Determine your priorities according to creditor by deciding who needs to be paid first. Your first set of priorities should be credit cards with the highest interest rate, typically department store cards. Look for charges for late payments and minimum payment requirements.

4. Transferring your balances to one creditor can be helpful in keeping track of your progress. Investigate any opportunities to transfer your existing balances to a card with a lower interest rate. Be aware of the time limitations associated with promotional cards offering an “introductory” low interest rate.

5. Reduce your spending and set a realistic budget. You may have to tighten your belt and say no to some of those extras for a brief time period.

6. Set goals. Once you’ve achieved them, reward yourself with small indulgences.

7. Once you’ve eliminated your debt, revise your budget and stick to it.

8. Remember to spread your holiday shopping and spending throughout the year to take advantage of sales and to avoid overextending yourself.