Most of us have been there – incurring credit card debt and seeking ways to consolidate it and other debt by utilizing another credit card. Unfortunately, the 'borrowing from Peter to pay Paul' mentality is alive and well and, as a result, consumer debt is higher than it has ever been in history.

The current economic crisis has produced a 'credit crunch' that's wreaking absolute havoc on credit card interest rates. Even though the Federal Reserve has lowered interest rates dramatically, that course of action has not had the effect of decreasing the interest rates on credit cards. To the contrary; because of the increased burden on consumers, many individuals are either going into default or declaring bankruptcy. Moreover, banks are raising interest rates for those that have been late in making their payments or who have skipped a payment or two.

If you have reason to be concerned about your current debt, here are a few ways to help you positively deal with the situation:

Be wary. When you receive a credit card offer in the mail stating that you can pay off your other credit cards by applying for the card with a 0% APR, be sure to read all of the fine print first. The 0% APR is applicable for only a short time period of time. Unless you can pay off the new card within the given introductory time frame, you'll just be moving the debt from one place to another and, depending on the post-introductory interest rate of the new card, you could even be creating additional debt.

Use only one card. If you have more than one credit card, save one for emergency use only and cut up the rest. Then, if you cannot afford to buy an item with cash, don't buy it at all.

Pay down existing debt. Given the severity of the current recession, it's likely that the next few years are going to be a bit more difficult than we're used to. Start paying off your credit cards and other debt using the 'Debt Snowball.' Make a list of your debts, with the highest-interest-rate account at the top of the list. Instead of paying the monthly minimum to the debt on top of the list, add additional money to that payment. Once the first account is paid off, use this same method with the second, and so on.

Stay away from department-store credit cards. Undoubtedly you've been asked by the cashier at a local department store if you'd like to apply for instant credit in order to obtain a discount on the purchases you're making right then. Do not apply; in other words, just say "No." Department store credit cards typically carry the highest interest rates among all credit cards.

We are a nation in debt – well over a trillion dollars' worth. Since no one really knows how long this current recession will last or how it will ultimately affect our income and retirement savings, it would be prudent to resist any temptations that may come your way inviting you to spend frivolously or more than you can afford.

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