3 options for debt management

Debt management can seem like a no-win situation when you're in over your head, but keep in mind the first step is always the hardest. There are simple debt management steps you can start today in order to begin reducing your expenses and paying off your debt.

Credit card debt management

If you're juggling more than two or three credit card bills per month, it's time to get your credit in order. Interest rates alone on several open credit accounts can load up your debt. Look into consolidating your credit by paying off smaller balances and closing credit accounts that you don't need. Keep two or three multipurpose credit cards around. Be careful when using consolidation as debt management. If done the wrong way, consolidation can cause harm. Consider consulting a professional for debt consolidation.

Auto loan refinance

Debt management through an auto loan refinance is a good option for those who have improved their credit rating since the original loan. If you have steadily increased your credit rating, you may be able to refinance your auto loan and qualify for a lower interest rate. Start by ordering your credit report to check your standing. By law, you are entitled to one free credit report per year. When refinancing, look out for prepayment penalties on your current loan and figure out how your current rate is calculated. To search for rates, check out Bankrate's auto loan calculator.

Debt management and your 401(k)

Tapping into your 401(k) for debt management reasons should be a last resort, but it is an option. Before you do, make sure you'll still be able to contribute to your 401(k), that your job is secure and that you've exhausted all other possibilities. Talk to your 401(k) administrator to get the details on your specific plan.

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