Guest Author - Rhonda Cliett

You make monthly payments on your credit cards but you see only a modest reduction in your balance, if any reduction at all. Is it possible to get out of credit card debt? Absolutely, but you need a plan of action to get you started. Listed below are five steps to get you on your way to being debt free.

Step 1 - Stop using your credit cards.
The combination of continuing to charge on your credit card, along with paying only the minimum payment, will make it almost impossible to reduce your credit card balance. While the credit card companies will love you for the large volume of interest you are paying, your bank account will suffer.

Step 2 - Pay more than the monthly payment.
Instead of automatically writing the check each month for the minimum, pay the absolute largest amount that your budget can tolerate. Once again, the credit card companies are going to love you when you pay only the minimum amount due because this maximizes the amount of interest that they will receive from you.

Step 3 - Keep track of your progress.
You can use programs such as Microsoft Money or Quicken, or you can use a computerized spreadsheet or an old-fashioned columnar pad. The goal is to track your progress so that you can visually follow your results.

Step 4 – Reduce your Interest Rate
If the rate on your card is high and you have had your card for a while you may be able to receive a lower interest rate on your card. A lower interest rate will allow you to pay less interest which will increase the effects of your efforts to pay off your debt. Call the credit card company and request the lower interest rate. If you have been paying your balance on time each month you may be pleasantly surprised at their willingness to reduce your rate. Don’t be afraid that they are going to say “no” – the risk of being told no is worth the possibility that they will say “yes.”

Step 5 – Transfer Balances
If you already have some credit cards with a low interest rate you should transfer balances from cards with a higher interest rate to the lower interest rate cards. Typically, when trying to pay off debt, you do not want to open new accounts. However, if you are unsuccessful at negotiating a lower interest rate on your current cards, and you receive an offer for a new card with a lower rate, you should consider obtaining this new card. Make certain that you will be able to transfer balances.

Don't be overwhelmed at the task of reducing your credit card debt. If you have a large amount of debt, it can seem like an impossible task to get out of debt; however, you can do it. One of the most important steps is to track your progress. You will be amazed how successful you feel when you see your progress. And, this feeling of success, is the motivation you need to keep you on track.

You might also enjoy these articles:
How to Overcome the Deception Used by Credit Card Companies
Book Review - Organize Your Personal Finances in No Time by Debbie Stanley

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