Excessive credit card debt can quickly become overwhelming if you are carrying a balance month to month. Carrying a balance means you are charged more over the life of your credit line. Your credit score will hurt, making your mortgage and car loans more expensive as well. Ultimately, you will fail to build your net worth if you do not manage your debt. When you cannot pay off all of your debt, though, do what you can to stay afloat.

Pay Off the Highest Interest Rate First

It sounds simple, but too many people make this mistake. Pay off the credit card with the highest interest rate first. Typically, this is the department store or grocery store card. Simply pay off the minimum monthly interest payment on those cards with the lowest rate. You will get to them eventually. Save yourself money in the future by paying off the expensive cards now. Once they are paid off, cut the cards. The less cards you have, the easier it is to control your budget.

Do Not Let the Debt Go to Collections

Lenders want to work with you. It may come as a surprise to many, but you want the same thing your lenders do. They will help provide options when you are proactive in contacting them about your circumstances. Ignoring collections calls or bills with increase tension and ruin any goodwill the lender will extend your way. Once a bill goes to collections, the collections team only gets paid once you pay. They will not have your best interest in mind.

Prepare a Proposal for Your Lender

Tell your lender what you can afford to pay each month and propose a solution. Many lenders will agree to stop collections on a bill if you give them reason to believe you will pay the balance in full. Your proposal may include character references, a letter from an employer or a statement from your mortgage company. If a credit card company sees you are not going to flee and intend on paying, they will be more likely to extend you options.

File for Financial Hardship

Did you lose your job or suffer a recent illness? Are you going through an expensive divorce? You have a right to ask to defer your debt payments if you have suffered a recent financial hardship. Credit card companies are generally willing to do this because it means they will make more money over the life of the loan. You usually can only do this once, so use the plan wisely and start saving money to begin payments at the agreed-upon date.

Consider Debt Management Alternatives

Debt consolidation, settlement or refinancing are valid options for those buried in credit card debt. The processes are intimidating if you have never been through them. However, many people avoid bankruptcy by pursuing one of these options. Contact a debt management agency or your lawyer if you feel this may work for you. They will show you options based on your current debt.