The first thing you have to do is assess your real situation. You cannot tackle the debt unless and until you are ready to make a completely honest appraisal. You need to pull out all your credit card statements; education, car, home, and home equity loan statements; utility bills; insurance bills; and anything else that documents how much you owe. It's time to record the cold, hard reality of each. Below is a sample table to help you start the process of tracking your debts.

Credit Assessment

Read the Fine Print

Compiling the list of accounts also means that it's time for you to get out a magnifying glass and read the fine print. You're looking for the following:

• Interest rates (APR): This is the annual percentage you pay for the privilege of using the credit card. Even if you opened the card at 9 percent, if you missed any payments, racked up one or more late payments, or surpassed your credit limit, the issuer may have added a stiff interest hike (unannounced). Make sure you monitor what your finance charges are per month.

• Periodic rate: This is the interest rate you are charged on your purchases or balance each month. You can calculate this by dividing your APR by 12 (months).

• Finance charge: This is the monthly fee added to your balance based on the monthly interest rate. Compute it by dividing your APR by 12 and multiplying it by your balance.

• Grace period: The amount of time (25 to 28 days) that lapses between when you make the purchase and when you have to pay those charges to avoid interest charges. If you are only making minimum payments on existing balances, you lost the advantage of paying within the grace period. Some cards now eliminate grace periods, but they can be useful, so opt for cards that still offer them.

• Fixed versus variable rate: Most credit cards have variable rates, and the very bad news is that most of them state in the small print on the back of your bill that they can raise your rates at any time, for any reason. You need to monitor this rate so that you can catch hikes in time to minimize damage.

• Annual fees: This can include a $40 to $80 fee for the privilege of using the card. Try to find a card that doesn't charge an annual fee — easiest to do when you have good credit.

• Hidden fees: If you read the small print, these extra charges are not really hidden. Charges can include balance transfer fees, cash advance fees, special services, and over-your-limit fees, all of which can be excessive.

• Credit limit: Remember your target is to get the balance down so that 70 percent of your credit limit is available (but not used!).

• Consequences: If you don't pay the bill on time, will you lose your house, your car, or your account? How much will your interest rates increase if you falter — go over your credit limit, slow pay, miss one month, pay less than the minimum, or fail to pay?

This information will help you know what needs to be paid first and to construct a viable game plan for paying down your debt. Congratulations! Knowledge is always better than denial, and you've just learned an important step in mastering your debt and becoming a savvy consumer.

Phone Calls That Can Change Your Life

Once you have the credit card accounts ordered, it's time to call each credit card company (or department store) and request a reduction in your interest rate. If you have been a long-term, responsible customer, they may automatically reduce the rate. If the first person you speak with says that they are not authorized to lower the rate, ask to speak to a supervisor. It's wise to maintain a professional, polite tone and calmly ask for what you want. If you still don't get what you want, ask to go another step up the ladder. Persist, and you will often succeed.

If you are going through a rough patch financially that you expect to smooth out, don't be afraid to share this information and to ask the supervisor if she will allow you to make interest-only payments for six months, or if she will assist you in setting up a long-term payment plan. The issuer may freeze your account for the time being, but that will help you get your finances back in line, and you can reopen it when times are better.

Get Ready, Get Set, Pay Down!

Okay, now it's time to create an action plan to pay down your debt. Using the assessment table that you created, you need to rate the urgency. For example, things like house payments, car payments, utility bills, and insurance payments take priority over credit card debt. Order your essential (hopefully good) debts so that you will pay the most important bills first. Once again, using the chart you created, allocate funds to pay minimum balances on all the accounts, and then subtract them from your income. Using this figure, deduct your budgeted living expenses to calculate the real amount of income remaining to pay down credit card debt.

Generally, you'll want to pay down the cards with the highest rate of interest first. However, if all of your cards are maxed out, and all the interest rates are in the same range, you may want to distribute funds to bring them all down to a more manageable balance. Ideally, 70 percent of your credit limit should be available.

Once you have reduced interest rates, or agreed to a payment plan with the creditor, it's important that you meet your commitments to the creditor and commit to your own plan for maximizing payments to pay off, or at least pay down, the accounts.