Dissolve holiday debt
December bills are coming due...here's a 4-step plan for dumping debt for good.
Carmen Wong Ulrich, author of "Generation Debt"

NEW YORK (CNNMoney.com) - Which do you dread most: stepping on the scale or checking your mail? This time of year, it's a tossup, thanks to all the feasting and spending most Americans do during the holidays.

All that seasonal indulging is showing up right about now in the form of bulging waistlines and credit card balances.

We can't help you get your weight back in line -- but we can show you how to trim that post-holiday debt with this easy 4-step plan.

Step 1: Open your bills when they come in.

It's tempting to let the mail pile up when all it contains is bad news. But whatever satisfaction you might get from avoiding your bills will vanish if you miss a payment and are slapped with late fees and a hiked-up interest rate.

Take control -- show those envelopes who's boss. Open them and pay close attention to what's inside.

Step 2: Call your credit card company for lower interest rates.

If you have cards with interest rates higher than 12 percent, call customer service and ask to have your rate reduced by a couple of percentage points (it's worth waiting to get through to a human being--promise).

Don't be intimidated: You're asking for something that is very much within your rights as a cardholder. Especially if you have a good credit history, most card companies are happy to have your business and will reward you by lowering your rate. But you have to ask.

Step 3: Focus on paying off the card with the highest rate.

Think about it: The bill with the highest interest rate is your most expensive debt. Focusing on paying it off will save you quite a bit in interest payments in the long run.

Start by ranking your credit card bills in order of interest rate, highest to lowest. Set aside the bill at the top of your list (just for a second). Pay the minimum balance on the rest of your cards, and then put the maximum you can possibly afford against the card with the highest rate.

Use this technique until you've paid off the first card on your list, then sic your money on the next, and then next, until you're done with them all. You'll be surprised as how easy it is to pay down your debt this way.

Step 4: Close those store credit cards.

Department store and chain store credit cards carry some of the highest interest rates around. Cancel them right away, even if you carry a balance. That will keep you from using them again.

Then, once you've got the balance down to zero, swear them off for good. If you don't pay the full balance, the interest you'll pay will eat up any discount you get for opening one of these accounts -- and then some.

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