DIY Debt Secrets

You may feel you need step-by-step support and guidance to extract yourself from the vise grip of credit card debt. However, taking control of your finances and alleviating the burden you are carrying due to excessive debt and interest charges can be done on your own without the need for fee-based services.

Call the Card Issuer

Although high fees and interest may be welcome by credit card issuers, the last thing they want to see is you falling so far behind that they have to write off part or all of your balance. Running from the issuer and not returning calls does nothing to help your cause. Pick up the phone and politely ask what programs are available to ease your debt pains. You may be able to obtain a lower interest rate or get fees waived just by asking and agreeing to do a better job servicing the account going forward.

Consolidate Balances

Take stock of your credit cards and note the available credit and interest rate on each account. You may find that you have some accounts where there is significant available credit and that has a lower rate than the interest on one of your other cards with a balance. Make an effort to move balances to lower-rate cards or open new accounts with low or 0 percent promotional interest rates on balance transfers. If possible, try to get the balance transfer transaction fee waived as part of this effort. If you can move balances from higher-rate cards to lower ones, you will save a great deal in interest fees and be better able to pay off your debt.

Establish a Budget

If you find yourself in credit card trouble, you may find that irresponsible spending, at least in part, contributed to the high balances. Use a financial management software tool or spreadsheet to evaluate your spending habits and see where you can cut spending. If you find yourself hitting the movie theater three times a week, consider renting movies or watching one at home on cable television instead. Eliminate all extraneous expenses and develop a spending plan that works within your earnings capability. Establishing a budget can be empowering and help you better handle the stresses of dealing with credit card debt.

Pay Early

If your balances are accruing interest, you may not be aware that as soon as you make any purchase of any sort, it begins to accrue interest. That is, there is no grace period. Start reducing your average daily balance -- the most common technique used to calculate your interest charges -- by paying down your credit card as soon as you have cash available rather than waiting for the payment due date. For instance, a card with a $1,000 balance paid off on the payment due date will see interest charges apply to about $967 versus $34 if you pay off the $1,000 the first day of the statement period.