(ARA) - You've heard the old adage, pay down your credit card debt each month to avoid the nasty interest rate charges and fees that result from revolving balances. But if you're like many of us, you need to carry a monthly credit card balance to pay for basic living expenses and emergency purchases.

This is exactly what the credit card companies want you to do - it's how they make money! One thing you may not realize is that by simply making your minimum payments it will take you a long time to eliminate credit card debt. Moreover, what happens when this credit card debt becomes too great of a burden, when you can no longer afford to keep up with your monthly minimum payments? Or worse, what happens if you experience a period of unemployment, or are facing unexpected medical costs?

The short answer is that credit card companies still want and expect you to pay back your credit card debt. Indeed often during this hardship period credit card companies will make your life worse by increasing the rates and fees on your credit card debt. The good news is that there are alternatives for you to eliminate credit card debt. Each will require patience, financial discipline, and thoughtful consideration on your part. The most important thing is to make an informed decision to eliminate credit card debt based on the factors of your particular situation.

Accelerated Repayment. One option you have to eliminate credit card debt is to increase the monthly payments you are making on your credit cards beyond the minimum payment. To take full advantage of this strategy, you want to make the largest possible payment on the credit card with the highest interest rate, while making the minimum payments on the remaining cards. You would continue to do this until you have paid off the card with the highest interest rate, and then focus on the card with the next highest rate, and so on until all of your cards have been paid off. Of course, this alternative requires that you have the funds available on a monthly basis to make these accelerated payments. In addition, it could take quite a while to eliminate credit card debt this way.

Debt Consolidation. Another option to eliminate credit card debt is to take out or refinance a mortgage- either a first, second, or line of credit - and use those funds to pay down your credit card debt. This can be a quick way to eliminate credit card debt and save on interest costs. Remember though that you are trading unsecured debt for secured debt and the repercussions of missing a mortgage payment, like potentially losing your home, are much worse than if you miss a credit card payment. Also, you will need to have a favorable credit profile to consider this option to eliminate credit card debt.

Consumer Credit Counseling. A third option to eliminate credit card debt is to speak with a non-for-profit Consumer Credit Counseling Service (CCCS). These organizations will consult with you to determine if you qualify for a debt management plan, which typically involves making one monthly payment to them, which they then disburse to your creditors. They will also work with your creditors to waive certain fees and lower your interest rates. Keep in mind that this is not the fastest way to eliminate your credit card debt, and there are credit implications that you will need to consider. You will also need to find a reputable agency.

Debt Negotiation. A somewhat less known yet viable alternative to eliminate credit card debt is Debt Negotiation, sometimes referred to as Debt Settlement. In these programs you typically save money into a trust account, and once you have saved enough the company you are working with will negotiate with your creditors for a reduction in what you owe. A big benefit of these programs relative to CCCS, for example, is that you are actually reducing the principal amount of what you owe, and not just the interest rate. Also, these programs are usually a faster way to eliminate credit card debt than CCCS. Be sure to check with the BBB to determine whether the Debt Negotiation company you are speaking with is registered and has a satisfactory rating. In addition, before enrolling make sure you understand the impact that a debt negotiation program will have on your credit, and any other risks involved.

Bankruptcy. The last option to eliminate credit card debt is to declare personal bankruptcy. In a traditional Chapter 7 bankruptcy filing you may be able to eliminate credit card debt completely, depending on your situation. Before considering this step, you must consult with an attorney who will tell you whether you even qualify, as recent laws have made it more difficult for consumers to file a Chapter 7 to eliminate credit card debt. Your attorney should also explain to you the negatives associated with personal bankruptcy, such the severe, public, and long term negative impact on your credit report.

Which program you choose, to eliminate credit card debt, is up to you, but make sure you do your homework and pick the right solution and the right company that meets your personal financial and personal goals.

To get a free debt relief consultation log on to www.bills.com.

Copyright © 2006 ARA Content