As of July 2008, US credit card debt totaled $962 billion! It is estimated that 1 in 20 American households owe more than $8,000 in bad credit debt. There are many ways to get rid of this debt. You may try to go it alone or you may enlist a debt reduction or credit counseling specialist. Some people take out home equity loans as a quick fix, while others declare bankruptcy to wipe the slate clean. It all just depends on your personal financial situation.

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Often, you can get rid of credit card debt through credit card debt reduction services. If you're not disciplined enough to stick to a budget, then keep track of your bills and adhere to a repayment schedule with your creditors, as you will need a credit card reduction company's help. Many of these companies, such as Consumer Credit Counseling Services, are non-profit organizations with low fees. However, beware of companies requesting giant upfront fees, and who claim they can repair your credit overnight and who aren't listed with the Better Business Bureau. You may be able to find reputable companies in your area through universities, military bases, credit unions, housing authorities, banks and branches of the U.S. Cooperative Extension Service. Educational workshops are a great way to minimize bad credit debt and create a solid plan for the future.

To keep out of credit card debt, you should first only take advantage of offers you actually need. There is no reason to ever have more than a couple of credit cards. Having an unsecured credit card you never use is worse than just buying one thing per month and paying it off each month. To build your credit wisely, you may want to use a secured credit card, where you pay the bank your credit limit upfront and then only take out what you have put in, which is sort of like a debit card, only this one gets reported to all three credit bureaus to show your progress. Speaking of debit, use your credit card as you would a debit card, subtracting each purchase from your savings to be sure you're not overspending. Ideally, you'll want to pay on time and in full because only paying off the minimum balances can take years to pay off the full amount, given the interest. Be sure you don't max out your credit cards as well. If you're using over 30% of your available credit limit, then your credit scores will go lower.

Some people consider declaring Chapter 13 or Chapter 7 Bankruptcy to get out of credit card debt. To decide if this is an option for you, ask yourself the following questions. Are your debts from unsecured credit card balances and things that a bankruptcy would wipe clean? If you haven't paid on your cards in a long time and find yourself slipping behind on regular rent/mortgage/utilities/auto loans, then bankruptcy won't help you. Will your current debt repayment plan take more than four years to pay off? If so, then you may as well take the low credit score hit and declare because the sooner you get help, the better. Do you have $30,000 or more in credit card debt? If your debt starts to approach your annual salary, then it's out of control. Chapter 7 Bankruptcy involves liquidation of all assets that are not exempt, such as autos, work tools and household furnishings, with a court-appointed trustee selling some of your property. Chapter 13 allows people with a steady income to keep property (homes, cars) and offers a more reasonable 3-5 year repayment plan instead. Ultimately, bankruptcy can prevent foreclosures, repossessions, wage garnishments, utility shut-offs and debt collection harassment, but it will give you a very low credit score and remain on your financial file for 10 years.

It is really nice to get a brand new credit card that has a high limit. At first you promise yourself that it is just for emergencies but before long you notice that you are using that credit card for day-to-day living expenses. To make matters worse, the problem usually does not stop with just one credit card. Slowly bad credit begins to accumulate and before long you find yourself in a world of trouble. There is not enough money to pay off the bills and interest keeps piling up. Stop living this way! There are ways to rid yourself of that baggage and find a better way to live.

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