Like many Americans, perhaps you’ve racked up big credit card balances. And like many, you're determined to eliminate your credit card debt and rid yourself of those huge monthly payments. Good! But how?

You do your research and you discover that many credit card debt settlement schemes sound like scams. They promise debt relief but it seems as though you will pay the settlement company big fees with no guarantee of success! Same with debt elimination plans—they are scary because they claim that your debts can be wiped away as if by magic. Even some credit counselors want huge upfront fees for credit card debt elimination.

Thousands of people just like you have “taken the bull by the horns” and paid down their debts themselves—and you can too. You just have to know where to start.

Get Effective Credit Card Debt Advice
For guidance, talk to a reputable credit counseling agency. A leader is the non-profit National Foundation for Credit Counseling, which has more than 100 member agencies and nearly 850 offices in communities throughout the country. Whichever credit counselor you choose, make sure that you discuss fees; you must be comfortable with what you are paying relative to the advice you're getting.

Make a Clear Budget

Once you have a plan, make a budget. Do the math!

• Add up your balances. Let’s say you owe $15,000 on three credit cards.
• Check your interest rate (APR). Say it’s 20% on all three cards.
• Add up your minimum payments—on the three cards you must pay a total of $525 per month just to make the minimum payments.
• Go to a website that offers an online credit card payoff calculator such as or Plug in the numbers.

Using the amounts in the example above, if you paid only the minimum of $525 per month it would take you a whopping 17 years to pay off your credit card balances! And you will pay over $12,000 in interest!

What can you do? Here are your choices:

1. Reduce your interest rate. You can do this by calling your credit card company and asking for a lower rate. You might qualify—it never hurts to ask. If they refuse, tell them that you need to cancel the card and go on a payment plan to pay off the balance. You will lose your charge privileges and your credit rating will take a hit—but it’s better than going into arrears or, even worse, defaulting.

2. Take out a lower-interest loan for $15,000, pay off all the cards, and then pay off the loan. You can do this only if you have good credit. And, credit card debt is unsecured, which means that your property has not been used as collateral. If you take out a home equity loan or refinance your car, these are secured loans. You’ll be using these assets as collateral. They can be seized if you default, so make sure you can make the payments!

3. Work with a reputable debt consolidation company. Be careful—there are a lot of fly-by-night scam artists out there. Be sure to thoroughly check out the company with the Better Business Bureau.

4. Make a household budget! This is perhaps the most important part of your plan. You ran up credit card balances because you spent more than you earned. Cut out the impulse purchases. Trade in your gas guzzler for a more economical vehicle. When you go food shopping, take a list and stick to it. Vacation closer to home.

You can eliminate your credit card debt yourself if you plan carefully and always remember to spend less than you earn!