It's amazing how credit card companies seem to hold our lives in their hands. With high interest rates and tons of fees for this or that, they seem to ruin our financial lives. The situation often seems insurmountable too, as the credit card debt continues to pile up. Notice the key word "seem" though. In all reality, credit card companies are just enablers, but they aren't the ones responsible for creating debt. It's we the consumers.  Our nation is currently in a recession largely due to the banking and credit situation which both consumers and lenders created.

The simple fact though is that we are responsible for racking up all that massive credit card debt, regardless of the circumstances. Once we start wielding the plastic, sometimes it's like it's impossible to stop spending. We almost feel rich with all that spending power, when in fact it could really suck us dry.

On this webpage, we'll examine how to get rid of credit card debt legally, freeing yourself from the weight that this debt places on you and your financial well-being!

First and foremost, you need to take a serious look at your accumulated credit card debt. Millions of people have debt, and some have much more than yourself. Yes, it can be frightening to look at, but knowing the exact amounts of debt, number of cards, payments and interest rates is extremely important. Shed that fear and know you are striving to get your financial situation better!

How did you answer the poll above? You probably have an estimate of your total credit card debt, but you need to know the exact amounts. The best way is to write down each credit card you have, and the total amount you owe on that card. It may also be helpful to include your monthly payment amount as well. You need to have all this information recorded. You can even use a spreadsheet program like Microsoft Excel. That will make it easier to total up the amounts of debt. With this information, you've completed an important first step towards improving your financial well-being!

Once you've recorded all of your debt amounts you know the big picture, and can form the best plan of attack to pay off that credit card debt.  Realize that you will now set up a smart, effective way to eliminate your debts and get back on track towards financial prosperity again.  Now take a look at the various debts and determine your lowest balance card, your highest interest rate card, and the card with the highest monthly payment due.  This will be the basis for your choice in how to start paying off those debts.

There are different schools of thought in how to do this, with some debt experts arguing for one way and some arguing for another.  Two methods that are argued are paying off the lowest balance first, and the method of paying off the highest interest rate.  If you pay the lowest credit card balance first, it can give you a positive means of reinforcement that you've payed off one card, and can attack the next.  It also gives you more money to devote towards that next card you must pay off.

Paying off the highest interest rate card is also very smart.  Credit card companies are making their money due to these high interest rates that they put on the cards.  Some are ridiculous, but we've got ourselves into this mess as overspending consumers who have abused credit at times.  When you pay off the highest interest rate, you've saved yourself a lot of future money from being drained out through interest.

Another method would be to pay the card with the largest monthly payment off first.  Keep in mind that whichever method you choose or prefer, you'll be able to apply even more money towards the next card once you've payed one off.  So it creates a positive sort of "debt payoff snowball" effect, where you keep rolling the payments bigger to attack the next credit card.  Eventually, over time you'll have payed off all the cards. 

Sometimes, you'll find you've fallen way behind in paying your debt on a particular card. Usually, if you've fallen behind by over 6 months, the credit card company starts to get serious and may start sending credit collections agencies after you. I've had this personally happen several times. Don't fret if this becomes your situation, because it may present a somewhat helpful solution.

It may get to a point where the credit card company feels you won't be able to pay them back. They'll close your account and the credit collection agency steps in to constantly hound you to pay. Many times these situations lead to a deal being presented, at times where you can pay off just half or even a third of what you owed for your credit card debt!

Now before you decide to stop making payments on a card so you can do this, realize the impact this will have. Usually taking a deal like this will result in 3 issues, possibly more. This is known as a debt settlement, and despite the fact you've settle your debt, this will put a mark against your credit report.  Usually the mark will last for up to 7 years on your report, so keep that in mind before you choose to make a deal.

Another issue is that you will have a closed credit card account.  When a card is payed off but stays open, it keeps that credit attached to your name, even if you just cut the card up.  When you have a credit card account closed, it closes off that credit in your name. The more credit accounts that close, the less credit you have. You want your credit in good standing, and your debt to credit ratio will be impaired by all closed accounts.

You'll also have an obligation to the amount of debt they didn't make you pay, as income tax. That's right, you may have reduced the debt owed, but it comes back to bite you when you must report that $1,000, $2,000, or whatever amount as extra income. After all, there's no free money, especially in the world of credit cards!

So if possible, always pay your credit card minimum monthly payment, and don't let it slide too far behind. The more it slides, the more advantage you're giving to the credit card companies and the more you may hurt your credit situation!

There are two other very popular strategies that people might employ to pay off credit card debt.  Both are costly in different ways, and neither will ever trump the concept of just paying off that debt on your own.  These two strategies are Credit Counseling and Debt Consolidation services.

Credit Counseling involves you contacting a credit counseling agency by phone, mail or website.  There may even be some agencies available in your town or city which you can go to, and speak to a counselor face to face.  Again, this is why it's important to have all your credit card debt info ready.  They will review your debt situation, and suggest and appropriate payment or debt management plan to help you overcome this financial burden.  In most cases, these are a paid-for service.  They will take over your accounts and deal with the card companies, trying to reduce interest rates.  You'll have a specific monthly payment you send to the counseling company which is applied to your various credit card debt.

One example is NovaDebt, who a friend of mine used.  They paid a $30 charge each month, but the program helped reduce their interest rates and get them out of debt in fewer years.  So while your interest rates are down, you will still be paying money to the counseling service.  Some financial experts like Suze Orman have even recommended that you contact the credit card companies yourself to talk interest rates down.

Debt Consolidation is very similar to what was mentioned above, and often is part of what credit counseling services will provide to you.  They basically will combine all of your credit card debt into one account, effectively getting rid of the interest rates.  You then are responsible for a large monthly payment to be payed towards the debt total, until it is payed off. It often takes several years, but you can look at it like a car payment, which will eventually free you from debt.

I'd recommend looking into the above options only if you determine you have an extremely difficult situation and don't know how to go about it.

Use the information above to your best advantage to improve your current situation.  Now, I won't lie and say your credit card debt is going to go away quickly, but the more you attack it, the more you resist to use those cards, and the more debt you pay off, the better you're going to feel.  It can be a lengthy process, but well worth it!

As you start to budget your money better and apply more towards paying down your credit card debt, you'll feel a positive surge within you.  This will be the beginning of a financial recovery for you, and possibly the road to financial freedom!