Voting continues in our New Year&39;s Resolution Poll and a new goal has overtaken "Prepare for home purchase" for the second place position. As of this morning, "Get out of debt" was the number two resolution with 21.7% of the votes. "Boost savings & investments" continues to dominate the top resolution spot.

Let&39;s talk about debt reduction a bit. It is a really excellent financial resolution for the New Year. Especially considering that the average household carries around $9,000 in credit card debt alone these days. Add in student loans, auto loans, electronic loans, mortgages and other debts; it&39;s no wonder that 43% of Americans are spending more than they earn each year.

Getting out of debt can seem really overwhelming and a lot of consumers use that as an excuse to ignore their debts or not face the issue head on. The most important step toward getting out of debt is often the hardest: simply taking a hard look at what you owe.

The best way to get a complete debt picture is to print out all your credit reports, loan documents and credit card statements. Write down the balances, interest rates and minimum payments for each account on a piece of paper. Once you have those totals, you can work on making a monthly spending plan that will allow you to pay as much as possible toward reducing your balances. Pay the minimums for each account and put the remaining money you alloted toward the debt with the highest interest rate and the highest balance. Continue this each month until that first account is paid off and then move on to the next highest rate/balance account. You can read more about this do-it-yourself debt reduction program online here.

These basic instructions work for most borrowers who have a somewhat manageable amount of debt to repay. Willpower is really the key to making type of debt reduction plan work for your situation. If you have credit card balances over $10,000 or debts that you simply can&39;t manage, you may need to seek out a different solution. Here are some tips and links that may help:

• Request a free debt consultation. Credit.com&39;s team of customer service representatives can help point you toward a debt solution that fits your needs. Either fill out the online request form or call 877-273-4273 toll free. Debt counseling programs, debt negotiation services and consolidation loans can all be solutions for borrowers dealing with specific types of serious debt issues.
• Transfer your credit card balances. Transferring your credit card balances from a high interest rate account to a low or 0% APR credit card can be a great way to save on interest while reducing your debts. However, there are a lot of hidden catches that could make this move a bad idea. Be sure to read all the terms and conditions on the new account before transferring the debt. Some accounts will charge expensive fees for the privilege.
• Negotiate with your creditors. An alternative to transferring balances is to call your creditors and negotiate a lower interest rate. If you&39;ve been a good customer in the past, you have a lot of sway when it comes to hammering out a deal with a credit card issuer. Don&39;t be afraid to ask.
• Understand collection accounts. Collection accounts are different than standard credit and loan debts. These negative records will remain on your credit report for 7 years, whether or not you pay them off. If you are dealing with collection records, read this article before taking any action.
• Consolidate or refinance. Depending on your financial situation, consolidating student loans or refinancing an auto loan could help you save a bundle. You&39;ll reduce your monthly payment and possibly your interest rate in both situations, but you&39;ll also extend your loan term and increase the overall cost of your debt. Weigh these pros and cons before deciding to consolidate or refinance.
• Remember the credit score impact. Your debt-to-credit limit ratio is a big part of your credit score calculation. Debt balances adding up to more than 30% of your total credit limits can cause some major damage to your credit scores. Aim to have credit card balances below 10% for the maximum credit score boost.

Want more information? One of our CreditBloggers.com personal finance experts, Nancy Castleman, recently published an excellent article called "Make Reducing Debt your New Year&39;s Resolution." And as always, we welcome your comments and questions either in the feedback section below or by email at tidbits@credit.com.