Jab, another high-interest rate; and here comes an uppercut – it’s a call from another creditor. Just when you think it’s over, you’re hit with a left hook, “Sorry, we’ll need a deposit before activating that account.” Dealing with credit card debt can feel like a knockdown drag-out fistfight. With over 50% of Americans admitting to not paying their bills on time and credit card charge-offs reaching 4.7%, an end to the credit crisis is nowhere in sight. Banks are reducing lines of credit, no credit, bad credit offers are a thing of the past, and lenders have little sympathy for subpar applicants. To knock debt on its back, it’s critical to prepare yourself both physically and mentally.

Accepting the Challenge
Boxers decide before entering the ring that they are going to beat their opponent. They believe quitting is not an option and commit to enduring the pain and suffering that comes with battling an opponent just as determined to win as they are. Deciding to take control of your debt may be a long process depending on the amount of debt you have and the number of creditors you owe. In the beginning, you must decide to finish no matter what it takes.

Understanding Your Opponent
Now that you’re mentally prepared, it’s time to get a complete picture of your debt. To do this, I suggest creating a list of your creditors, their contact information, the balance you owe, due date, and the interest rate you are paying. This sheet should also include debts in collections. Information on old debts can be found on your credit report. You are entitled to a free credit report from each of the three agencies once a year. To obtain your report go to www.annualcreditreport.com or call 1-877-322-8228. If you don’t know your credit score, I recommend ordering it online to get a good gauge of how lenders view you. The scores range from 300-850. The higher the score, the lower the risk the creditor takes when loaning you money. There are many sites on the internet where you can order your score. It should cost you about $40 to obtain your score from all three agencies. There are sites that offer free scores, but be sure to read all the terms and conditions as many are only free when agreeing to enter a monthly credit monitoring program that charges a monthly fee.
It may be overwhelming or even depressing to see all your debt on one sheet, but remember, you’re committed to winning, and a positive attitude is essential to your victory.

Training
Paying all debts in one shot is unrealistic for most. The best solution for gradually eliminating debt is a simple technique called debt stacking. With debt stacking, you focus on paying the debts with the highest interest rate first. Therefore, instead of you choosing which debt should receive a “little” extra this month, you automatically apply the funds to the debt with the highest interest rate. It’s extremely tempting to pay more on the debt with the highest balance; don’t make this common mistake. You will save more money and diminish debt sooner by following the debt stacking technique. Once a lender is paid, use the money that becomes available to increase your monthly payment to the next lender. You continue to follow this process until you are completely debt-free.

The Fight
Armed with your strategy and committed to beating down balances, you’re ready to go. In the fight, it’s important to recognize your worst enemy is you. Too often, we blame the lenders for our personal debt crisis. Although lenders play a role with their unjust practices, you must battle against yourself daily, blocking urges of instant gratification and bobbing and weaving the temptation to live beyond your means.
Lawmakers are aggressively working on ways to protect consumers from creditors. Even with new legislation, the outcome of your fight is your responsibility. Like a skilled fighter, you must develop tunnel vision and focus on the benefits of winning.