Ken and Daria Dolan are widely known as America's First Family of Personal Finance.

Do you hear that sound? Listen closely... it's the sound of American consumers tightening their belts.

The endless barrage of troubling economic news and a badly bruised stock market have finally gotten everyone's attention. (Anyone still want to argue that we aren't in a recession?)

To protect your family and your finances during these very uncertain times, it is critical that you batten down the hatches and prepare to ride this out. One critical way to do that is by tackling your credit card debt.

Now let's be clear about something before we start... you DON'T need a lot of money to make an immediate dent in your debt. Armed with these three simple steps and even $10 extra a month, you can take a big bite out of your credit card debt. So let's get started.

STEP 1: Make more than the minimum payment. 47% of credit card customers are making only minimum payments each month.

At that rate, a $1,000 balance with 18% interest and a $10 minimum payment will take you -- GULP -- 7.3 years and $516 in interest to pay off!

But here's the good news: Add just an extra $10 a month -- less than the cost of a trip or two to Starbucks -- and you will shave off almost 4 years and save more than $200 in interest!

Click here to use a handy little calculator that will figure out exactly how much you will save if you make more than the minimum payment on your balance.

When you make extra payments, pay off your highest interest rate cards first. This will give you the most bang for every extra buck and will actually eliminate your debt faster than paying off the card with the highest balance.

STEP 2: Lower your interest rate TODAY. If you are paying more than 15% interest, you can save hundreds if not thousands of dollars by lowering your rate.

Credit card companies are pulling out all the stops to sign up customers. And they're not just after new customers... they're doing cartwheels to keep existing customers. Use this competition to your advantage.

Over the next few days, take a peek at any credit card offers you get in the mail rather than throwing them right in the shredder. As soon as you find one with a lower interest rate than you're currently paying, you have the ammunition you need.

Most of these flashy offers are only introductory interest rates that go up after six months or a year. To find out what your real interest rate will be, look for the "disclosure box," or as we like to call it, the "all the things we don't really want to tell you but we're required to by law" box. In this box, you'll find the card's normal interest rate after the teaser rate ends.

With your account number in hand, call your credit card company and say, "I'm calling about account number XYZ. I have been a good customer for X number of years. I have gotten offers for credit cards with much lower interest rates than you are charging me. I would like to keep giving you my business but cannot do so unless you can lower my interest rate today."

The person on the other end of the phone will probably say something like, "Oh, those are just introductory rates... you'll end up paying much more when the real rate kicks in." We want you to respond by saying, "I understand that this is an introductory rate, but even after the permanent rate kicks in, their rate is still lower than what you charge me. Can you lower my rate or should I take my business elsewhere?"

Worst-case scenario: They say no, and you still lower your interest rate by opening a new account someplace else. Is that so terrible? We don't think so! Best-case scenario: They say yes and you immediately start saving money with a lower interest rate on your balance!

STEP 3: Eliminate temptation. Purge your wallet of unnecessary credit cards. Americans carry an average of 15 cards per household. You really need only two or three, so apply scissors liberally.

Which cards should go first? Say goodbye to your department store cards. They usually charge outrageous interest rates, and almost any store today will accept MasterCard and Visa.

Next up on the chopping block: any card with an annual fee. With all the card options out there, you simply don't have to pay an annual fee these days. No ifs, ands, or buts about it.

There you have it: three simple steps to taking a BIG bite out of your credit card debt today. Please, please don't put it off. We expect rough waters ahead for some time, and getting rid of credit card debt is one of the smartest things you can do today for your family's financial well-being.

Ken and Daria Dolan, America's First Family of Finance, offer advice on everything from debt management to taxes to insurance at Dolans.com. This post is part of a series offering consumers advice on what to do during a recession.


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