Financial Goals

• A list of financial goals can provide a sense of direction for your debt management plan. Common long-term financial goals include saving up money to provide for a real estate purchase, college tuition or retirement lifestyle. You must recognize that these long-term goals may never materialize if you cannot get your debt under control. In the short-term, you may work to pay off all credit card debt within one year, so you can quickly free up extra cash to save toward your long-term goals.
  
  

Organize Debt Balances

• To help you to organize your debt balances, you can order one free credit report per year from AnnualCreditReport.com, as part of the Fair Credit Reporting Act. You can also purchase a copy of your credit report from TransUnion, Equifax or Experian at any time during the year. The credit report categorizes your outstanding debts according to type, balance and your record of making timely payments. You should verify that the credit report information is correct, before moving forward with your credit management plan. Each credit reporting agency provides online resources to help you file disputes, if necessary.
  
  

Negotiate with Creditors and Transfer Balances

• Contact each individual credit card company and attempt to negotiate lower interest rates. You are more likely to secure lower interest rates if you demonstrate a solid history of paying bills on time. At the end of your negotiations, list your credit cards according to interest rates, current balances and credit available. From this point, you can transfer portions of your more expensive debt balances onto a low-interest rate credit card that features available credit.
  
  

Personal Finances

• Review your personal finances, in terms of assets, income and expenses to locate sources of cash for making credit card payments. Bank deposits above six months' worth of living expenses can be withdrawn, and under-performing investments can be sold off to raise cash for paying down credit cards. Calculate your free monthly cash flow available for making regular credit card payments by subtracting expenses from income. For extra cash flow, you may choose to eliminate discretionary spending from your budget. Discretionary spending goes to purchase items such as designer jeans and luxury vacations, which are not necessary for survival.
  
  

Strategic Payments

• Prioritize credit card payments according to interest rates. Make the minimum payments on all credit cards, except for the card with the highest interest rate. Your goal is to preserve cash to make aggressive payments on your most expensive credit card.