If you have gotten in over your head in credit card debt, you are in good company. The Federal Reserve says Americans have accumulated nearly $1 trillion, a record amount, in what it calls “revolving credit.”

But while the financial experts are urging people to pay down debt — particularly expensive credit card debt — that is easier said than done.

It may help motivate you to look at your debt in a new light, said Hersh Shefrin, a professor of behavioral finance at Santa Clara University. Although many overstretched consumers think of paying off debt as a form of self-denial, Professor Shefrin said they have got it wrong. Debt, he said, is actually a form of borrowing against future consumption. In other words, paying off a credit card with a high interest rate now means you will have more money to spend on yourself later.

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WASHINGTON — As the fall semester beckons and financial aid from parents and the government runs dry, more college students are turning to credit cards to pay not only for their textbooks, meals and transportation but also for tuition.

A recent survey by U.S. Public Interest Research Groups found that two-thirds of college students have at least one card, 70 percent pay their own monthly bills and 24 percent have used their cards to help pay tuition.

That helps explain why the average survey respondent will graduate with more than $2,600 in credit card debt, and those with student loans will owe nearly $3,000.

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Let’s turn our attention now to some of the options you have to eliminate your credit card debt. One straightforward way is to create a monthly budget that takes into account all of your liabilities and assets (including taxable income) and then dedicates a set amount of money per month to getting out of debt. You can engage in self-debt consolidation by moving some money around, pooling money from savings to pay off a particularly high interest credit card, for instance.

Over time, as long as your budget allows you enough debt consolidation money to pay down the principles as well as the interest your debts are earning, you can become debt free. The only drawback here is that, if you need to make a large purchase, you may be unable to do so at great rates if you’re drowning in creditor obligations.

You can try negotiating directly with creditors or mediating a negotiation through a third party. While not all creditors will consent to reduce your rates or let you off the hook for some of your debt, negotiation is often worth a shot, particularly if you’re haggling over a small matter. After all, small bad marks on your credit reports can lead to lowered FICO scores and consequently higher interest rates later.

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Having trouble paying your bills? Getting dunning notices from creditors? Are your accounts being turned over to debt collectors? Are you worried about losing your home or your car?

You’re not alone. Many people face a financial crisis some time in their lives. Whether the crisis is caused by personal or family illness, the loss of a job, or overspending, it can seem overwhelming. But often, it can be overcome. Your financial situation doesn’t have to go from bad to worse.

If you or someone you know is in financial hot water, consider these options: realistic budgeting, credit counseling from a reputable organization, debt consolidation, or bankruptcy. Debt negotiation is yet another option. How do you know which will work best for you? It depends on your level of debt, your level of discipline, and your prospects for the future.

Self-Help

Developing a Budget: The first step toward taking control of your financial situation is to do a realistic assessment of how much money you take in and how much money you spend. Start by listing your income from all sources. Then, list your “fixed” expenses — those that are the same each month — like mortgage payments or rent, car payments, and insurance premiums. Next, list the expenses that vary — like entertainment, recreation, and clothing. Writing down all your expenses, even those that seem insignificant, is a helpful way to track your spending patterns, identify necessary expenses, and prioritize the rest. The goal is to make sure you can make ends meet on the basics: housing, food, health care, insurance, and education.

Your public library and bookstores have information about budgeting and money management techniques. In addition, computer software programs can be useful tools for developing and maintaining a budget, balancing your checkbook, and creating plans to save money and pay down your debt.

Contacting Your Creditors: Contact your creditors immediately if you’re having trouble making ends meet. Tell them why it’s difficult for you, and try to work out a modified payment plan that reduces your payments to a more manageable level. Don’t wait until your accounts have been turned over to a debt collector. At that point, your creditors have given up on you.
Dealing with Debt Collectors: The Fair Debt Collection Practices Act is the federal law that dictates how and when a debt collector may contact you. A debt collector may not call you before 8 a.m., after 9 p.m., or while you’re at work if the collector knows that your employer doesn’t approve of the calls. Collectors may not harass you, lie, or use unfair practices when they try to collect a debt. And they must honor a written request from you to stop further contact.

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