Many nonprofit debt counseling centers across the country will advise you for a low fee or at no charge. Some lenders will recommend debt counselors to you. Contact a customer service representative at your lender for referrals. Or, contact the Consumer Credit Counseling Service in your area. (Check the White Pages in your phone book.) They can often help you work out a repayment plan with your creditors.
Make a list of all your bills and their amounts. Figure out when each bill can be paid.
Contact your credit card company or other creditors to try to get your rate lowered or a different payment plan worked out.
Make more than the minimum monthly payment on credit cards. You will save lots of money on interest and reduce or eliminate your debt much sooner.
Stop using your credit cards. Say no to offers for credit cards, debt consolidation, and second mortgages. Cash advances can be trouble! Only get a cash advance when it is absolutely necessary. Higher interest rates (than you’re paying for card purchases) are usually charged, and the rates are put into effect immediately, without a thirty-day grace period. Most banks also charge a service fee based on how much cash you’re withdrawing. The same applies to personalized “checks” some credit card companies may send you.
Be aware of credit card rates and fees. Educate yourself about the annual fees, current interest rates, finance charges, cash-advance fees, and any other fees tied to your card. This knowledge can help you make better decisions about which card to use and how to manage your card. Transfer balances to cards with lower interest rates. Find credit cards that offer a low introductory 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 introductory rate has expired, the new card offers the same (or lower) interest rate as your current card.
Reducing your debt is challenging, but don’t stop trying. It’s one of the most important things you can do for a better financial future.