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By Joshua Jones
Managing Editor, MoneyMixTM 

Credit card debt soared to record levels in 2008 for those of us just starting out in life. 

Young adults accumulated an average of $3,173 in credit card debt attending the nation's colleges and universities in 2008 (usatoday.com April 12). While some may use credit to live beyond their means, a recent study found over 90% of young adults in school and carrying plastic charged direct education expenses such as tuition, schooA recent study found over 90% of young adults in school and carrying plastic charged direct education expensesl supplies, and textbooks (Sallie Mae April 2009).

what do we do now?

No matter how we got into credit card debt, what's important now is to figure out how to take control of this situation. Here are five steps to help you do just that:

  1. Commit to cash. Adding more debt is counterproductive to paying off your credit cards. So stop using credit cards for any purchases and use cash instead. If you can't afford to pay for the item with cash, you can't afford to buy it.
  2. Highest APR first. Identify which credit card has the highest APR and pay as much as possible above the minimum payment while maintaining regular payments on other credit card balances. Why? This will reduce the total amount of interest paid over time for all of your accounts.
  3. Stay the course. Don't let up as those balances and minimum payments begin to shrink. Continue paying as much as possible over the minimum payment for the credit card with the highest APR. Do this and the amount owed on that account will be erased faster. 
  4. Knock out small debts. Having many small recurring debt payments will add up to a large amount. Pay off any installment debts with low balances to free up money to increase those credit card payments and get out of debt faster.
  5. Roll over payments. Once you've paid off the card with the highest APR, use the same amount to increase your payments on the card with the next highest APR. Continue this cycle until all of your credit cards have a zero balance.
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