I'm in Debt and Can't Get Out...Help!

Image via Wikipedia In today's economy many people are taking on more credit card debt than they can handle, or what was once manageable has changed due to circumstances that makes their debt hard to repay.

Does this sound familiar to you?

Why are so many people in too much debt?

Most of the time it is through no fault of their own. They may have incurred the debt sensibly, but lost their jobs or become ill and were unable to work. Then they find themselves saddled with debt that they can no longer afford.

Or, by using poor financial management which causes many people to end up over their heads in debt. An increasing number of people keep multiple credit cards, which essentially multiplies their debt. Although they may be able to keep up with the minimum payments, interest keeps them in debt for many years. Also, many credit card companies are often willing to extend credit that the borrower may not make enough money to pay back.

How do you keep your debt manageable?

Compare credit cards for the best possible interest rates, and keep your open accounts to a minimum. One or two credit cards should be plenty. No one needs a pocketful of credit cards.

When paying back your credit card debt, try to pay more than the minimum payment due and this will prevent interest from accruing. If at all possible, pay the balance in full each month. This will save you lots of money and keep your credit in good shape. Stop charging if something comes up and you need to charge more than you can pay back in a month until that balance is paid off.

How do you get out of debt?

All is not lost though if you're already in more debt than you can handle. The key is realizing that there is a problem before it is too late. It will take discipline, but you can get yourself out of debt on your own in most cases.

Step 1: Stop taking on new debt.

Step 2: Work out a personal budget.

Start by making the minimum payment on everything each month. Put any extra money toward one debt until it's paid off, and then moving on to the next. Choose one of the following ways to pay off your debts: highest to lowest interest or by lowest to highest balance.

You may need some assistance if you've tried to manage your debts on your own but are having trouble coming up with any extra money to put toward them, or even enough to make the minimum payment. Talk to your creditors, explain your situation and see if they would be willing to reduce your interest and payments. If that doesn't work, credit counseling and debt consolidation are options.

It can be very scary when you find yourself getting into too much debt. But it is often possible to regain control of your debt on your own. If not, help is available. Don't be afraid to seek it out.