What are my options for paying off large credit card debts?

You do not have to jeopardize your good credit rating. I am sure you have worked very hard and diligently to accomplish this. You deserve some congratulations. And, don't feel too bad about the fact that you've accumulated a fair amount of debt along the way. We seem to be natural born consumers, and credit card debt does not mean you are reckless or are an excessive consumer. The fact that you make consistently substantial and timely payments means that you are an honest and responsible individual.

I do not recommend doing anything with your 401k except to continue putting money into it every year. The fact that you currently do this further establishes your fiscal integrity.

You can accomplish your goal in a couple of different ways. Debt consolidation usually involves combining multiple obligations into a single payment or payee. This will thereby lower your payment(s) by reducing the amount of interest you pay. Considering your good credit, a commercial bank or mortage lender will work with you. They can easily calculate how much you need to borrow, your monthly payment, the amount of interest you will pay and the life of the loan. Many consumers choose this option in order to lower their monthly payments by taking advantage of todays still fairly attractive rates.

The amount of the loan will depend upon how much credit card debt you intend to pay off. Before choosing the type of financing you apply for do some research. Lenders not only compete with one another, offering different different terms, but also different types of loans. If a home improvement loan offers preferable terms to a debt consolidation loan, you can apply that capital to paying off your debt.

Be very careful if you choose to go the credit counseling approach. Many companies offering to reduce your credit card payments and interest rates are not entirely ethical. Many advertise themselves as non-profits, but that in and of itself will not guarantee their legitimacy.

Many consumers do not realize that they can negotiate more equitable terms with their credit card companies by themselves. This is a very good approach if you don't mind paying multiple obligations each month. Call each company and assertively request they lower the interest rate. Of course they don't want to do this, but they also don't want to lose your business. Remind them of what a good and loyal customer you are. Ask them to show that they appreciate your business by granting you more favorable terms. Don't be afraid to be assertive. Remember, they don't want you to go somewhere else. Insofar as credit cards are concerned, you may also wish to consider applying for a new card(s), offering balance transfers at 0 APR's for as long as the first twelve months. This accomplishes the same result of lower interest, lower payments and the total amount of the obligation. This would be my recommendation.

After exhausting every effort working with your current credit card companies, re-calculate the total of your monthly payments at whatever new rates you're offered. And total the resulting whole dollar monthly savings. If you are still unhappy, you can always shop for a loan that would pay off most or all of your cards later.

Don't forget, as long as your credit is good to excellent, you are dealing from a position of strength. And lower rates mean a lower total of overall debt. Because your outstanding obligations are not the sum of the balances owed. They are the sum total of your outstanding balances "plus" interest.

Lastly, there are two things you must do. If you fail to do these two things, all of your efforts will not solve your problem. First, you must stop using the cards. Second, you must make a budget and stick to it. The debt does not accumulate by itself. This doesn't mean you must incorporate a Spartan existence. Merely adjust your lifestyle to position yourself in a more advantageous manner. Carefully rein in discretionary spending. You will wind up with more disposable income - and be able to save more than you realize.

You can still live enjoyably, and not feel deprived. All most of us need to do is re-evaluate a couple of things we're currently doing. Instead of paying the credit card companies, pay yourself. In many cases, somehting as simple as driving less can add substantial savings. Replacing the wheels with biking or walking saves money and provides great health benefits.

Save! You can never save enough, too much or too often. I guarantee that you will be very glad you did.

Good luck.

J