The credit card is an integral part of American life, and so is the consequent debt problem. Credit card debt means the total unpaid balance due on the credit card. Late payments result in penalties and more payments towards interest than principal, and affect your credit rating. If you have more than one card and you are not prompt in meeting the payment obligations, the problems compound, resulting in a financial mess.

Many people immediately resort to consolidation loans and debt management services when the debts get unmanageable. But these services involve fresh expenditure that may increase your payment obligations. Also, despite the rosy picture they paint, these services have many hidden clauses that are not easy to decipher. Debt management plans, especially, may not be suitable for people with very serious debt problems - in which case filing for bankruptcy might be the only way to start afresh.

Experts believe that one should consult a certified credit counselor before taking up any debt repair measure. Many non-profit organizations like universities, US Cooperative Extension Service, credit unions and consumer protection agencies offer free counseling. The counselor will review your financial situation, estimate how long it might take to clear the debts, give customized advice about whether you need professional debt management and help choose a reliable service.

In fact, there is no need to rush to paid services if you find yourself neck-deep in debt. You can chalk out your own debt management plan with the guidance of the counselor. First thing to do is to cancel all the cards except the one with the lowest interest rate, and then it should be used only for emergencies. While tackling the repayments, pay the debts with highest rate of interest. Paying more than the minimum is the key to extinguish debts much faster. If you pay just the minimum, you might be paying just the interest and it’ll take ages to clear the entire debt.

Many credit experts believe that prevention is better than cure, and the best way to deal with debt is to avoid going overboard with credit cards. First step is to prepare a budget and to spend within that budget. People who cannot resist temptation should leave the cards at home. By restricting oneself to one or two cards, it’s easy to keep track of purchases and payment obligations. You should try not to utilize the available credit fully. Remember, it’s never too late to start implementing these preventive measures.