No. of Recommendations: 1

If you have not done so yet, get thee to the fool school section of this web site. They have some teaching material that guides you through much of what you've just asked. Also, before one of those TMF folk get in, I think I remember seeing a $10 short course about getting out of debt.

That said ...

If you don't pay at least the minimums on your credit cards there's going to be big trouble. They'll send collection agencies after you, garnishing wages, and maybe a visit from guys named Vinni and Luigi (well, maybe not..). Oh, and black marks will be all over your credit record (in fact, there's already some black marks since you say you're behind on payments).

So.. what to do?

The general best strategy is the Snowball Method. You can calculate this out yourself to see .. but it is the least cost route to get out of debt, and it is real simple. You list out your debts and their interest rates. You're interested in paying the one with the highest interest rate first, since this will give you the most traction towards debt payment. You pay minimums on all but the debt with the highest interest rate, and you funnel all your spare cash into paying the card with the highest rate. When you pay that one off, you relist all the debts, and paying the same total amount of money towards debt repayment, you again pay minimums on all but the chosen card, and funnel everything into that one card. As they say on shampoo bottles, repeat until done.

At the same time you're doing this, it is a great idea to get a handle on your spending practices, and learn how to manage your money/resources. Otherwise you may do as I did - I once had a $4-6000 debt, got scared and gungho and paid it off, and then 5 years later found myself with $35000 in credit card debt. Don't do that, it hurts ;-) .. What I did while paying off the $35000 debt was to learn the ropes of the credit card system, banking system, and other personal finance, with an aim to knowing enough that I can manage my finances myself, stay out of debt, keep my spending within my means, and so forth.

You can do this!!!

Good luck!

- David
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