Get-Out-of-Debt Checklist

Does the old saying "Another year older and deeper in debt" ring too true? Take these steps now to reduce your debt and fix credit problems.

Free Yourself From Credit Card Debt

  1. Check Transfer your balance to a low-rate card.

    But only under certain circumstances. A zero percent teaser offer can be a good option if you plan to pay off your balance completely and you don’t charge anything else on the card. However, make sure that the lender is not charging any balance transfer fees, and beware: Terms can be changed at any time.

  2. Check Negotiate a lower rate.

    It’s possible if you have good credit.

  3. Check Close unused cards.

    If you never use a credit card, close the account and cut up the card to discourage identity theft. Make sure to get rid of newer cards first; a lengthy credit history with a single lender helps to improve your credit score.

  4. Check Visit

    The calculator estimates the time it will take to pay off your credit card debt.

Fix Your Housing Debt

  1. Check Contact a certified financial planner to discuss your situation and options.

    They are trained to provide advice for prudent money management.

  2. Check Consider refinancing.

    If you have an adjustable-rate mortgage (ARM), find out if you can refinance it to a fixed-rate mortgage. With a fixed-rate you’ll benefit from refinancing if you have top-notch credit and good, steady income.

  3. Check If you’re in danger of foreclosure, research your alternatives.

    You may be tempted to cut your losses and move on, but visit the U.S. Department of Housing and Urban Development’s Web site ( to research your other options.

Handle Student Loans

  1. Check Consolidate your student loans.

    Lock in a reduced interest rate to make your monthly payments more manageable and your budget more predictable.

Take Steps to Improve Your Credit

  1. Check Run a credit check on yourself.

    For a free credit report once a year, visit

  2. Check Consider a secured loan for debt consolidation.

    A single monthly payment can help you chip away at your debt faster. And if you make all your payments on time, your credit will improve.

  3. Check Limit yourself to three or four cards.

    Every new credit card application results in a credit-report inquiry, which causes your credit score to drop by as many as five points.

  4. Check Write out a strict budget and stick to it.

    It sounds like a no-brainer, but the best way to improve your credit score is to cut unnecessary spending and redirect extra income to start paying off debt.