I’ve been getting a lot of stories of people struggling to get out of debt because of the recent How to Fight a Debt Collector series. They haven’t reached the point of fighting debt collectors yet and they want to keep it that way. As much as others like to malign those deep in debt, the vast majority of debtors want to make good on what they owe.

If you’re in heavy credit card debt, the first thing you need to do is take stock of your financial situation and stop spending. You need to get yourself on a budget and stop the bleeding. Once you get that under control, the next step is to restructure your debts so you can make up lost ground. That’s where this post comes in.

The problem with credit card debt in particular is that the interest rate is always so high. We’re so used to seeing mortgage rates in the single digits that we forget that credit card interest rates are in double digits. Double digits! How is someone who has made spending mistakes going to recover if they need to pay 15-20% each year in interest?

They can’t. Once you’re on a budget and making regular payments, the next step is to lower the interest rate on your credit card debt. The answer, though, isn’t to go out and apply for low APR credit cards. That’s part of the answer, but that’s not step one.

Ask for A Lower Rate

Before you apply for a low interest rate credit card, try calling your current credit card issuer and asking for a lower APR. If you have been making regular on-time payments, there’s a possibility your credit card will just lower your interest rate. Since it costs you only your time to make the phone call to ask, I don’t see why you wouldn’t want to try this first. If they won’t budge, be persistent and say that you see better credit card offers available and you’re thinking about transferring your balance. The worst thing they can say is “no” and you lose nothing except a bit of time.

Consider Prosper, Lending Club

Peer to peer lending networks like Lending Club and Prosper are great places to try to get a loan if you have good credit. Both peer to peer lending networks require a fairly high FICO credit score (FICO 640+) and the loan funding ...

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