by Melissa Nykorchuk

Created on: November 17, 2009

Debt is scary. With credit cards being so accessible, personal debt can rise quickly, spiraling out of control. Before you declare bankruptcy and ruin your chances of ever buying a new house or car in the next ten years without a cosigner, consider the following tips to help you get out from under the pile of bills you have accumulated.

Negotiate With Credit Card Companies.

Call your credit card companies and ask for a better rate. Although this may sound ridiculous, credit card companies do not want to lose your business and may easily give you a lower rate to keep you as a customer. If your rate is high and the credit card company won't budge, ask if you can close the account and accrue interest at a lower rate. If necessary, (and if true), hint that you are considering bankruptcy. A credit card company will not get paid anything if you declare bankruptcy and any smart company will lower your rate in an attempt to recover any portion of your remaining balance possible.

Start With Debts That Have the Highest Percentage Rates.

Although you may want to pay down all of your debt at the same time, hitting the debts with the biggest percentage rates with the highest amount you can afford each month will cut down your overall interest payments. Pay the minimum payments on all other loans and put the rest of your bill money down on your high rate credit cards. If this does not make sense to you, consider it this way. You have a total debt amount and that debt has an average percentage rate. Paying off the debt with the highest percentage rate first will decrease your overall average percentage rate.

Stop Using Your Credit Cards. Cut Up High Rate Cards.

Before you can get out from under a mountain of debt, you have to stop creating the debt. When you pay off a high percentage card, get rid of it. Don't save a ridiculously high card for emergencies because you will end up using this card for purchases that are not necessary. The fewer credit lines you have open through loans and credit cards, the better chance you have of getting a better credit card with a lower rate. So close those high interest accounts and stop buying things you don't need.

Take Advantage of No Interest Credit Card Offers.

Now that you have been able to pay off a high interest credit card or two, you should be able to get a card that has an introductory low interest or no interest rate. Although you don't necessarily want to open another account, a low interest or no interest card that allows you to transfer a higher interest debt is a good deal. The less you can pay in interest overall, the more money you will have for your future. Find a good deal, transfer your higher balance over, and work on the debt as much as you can.

Taking charge of your debt will help you get a better handle on your future. Consider what you could do with all the money you will soon be saving on future credit card interest. It is worth some sacrifice now to ensure that you will be able to live debt free within a few years.

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