Answer...

Here is the anser to this Frequently Asked Question.

How can I reduce my current credit debt so that I can start investing?

• Don't get any deeper into debt. Save the credit card with the most favorable terms and cut the rest up. Put the one you saved in a safe place (not in your wallet) and use it only for emergencies (not to include a big sale at The Bay!)

• Pay more than the minimum balance. Much more.

• Shop around for cards with low interest rates, but beware of come-ons that offer a low introductory rate and then take a big jump. The Internet makes choosing a credit card easy, but be sure to read ALL the fine print.

• Move balances on cards with high interest rates to cards with lower interest rates.

• Use your savings to pay down debt. It makes no sense to earn 1 to 3% interest on your savings account while paying 12 or 15 or 18% interest on credit cards.

• Come up with a written plan for reducing your debt systematically.

• Add up all the money you spend each month on credit card payments, and think about what you could do with this money if you weren't paying it to the credit card company.

One of the best methods of systematically paying off your debts is what is referred to as the Credit Crunch. List your debts, including the balance and the interest rate for each one. Each month, pay the minimum balance on all credit cards except the one with the highest interest rate. Pay as much as you possibly can on this card each month until it is paid off. Then start paying as much as you possibly can on the card with the next highest rate, while continuing to pay the minimum balance on the others. Keep doing this until they're all paid off. This is the only time you should ever pay the minimum balance on any card.

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