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Effective Strategies for Reducing Credit Debt


Are you having trouble paying down your credit debt right now? We speak to a credit counselor and a certified public accountant about avoiding credit debt, and to discuss how people can reduce their credit debt in these tough economic times.

Maureen Cavanaugh: Lots of people have been going to the mailbox lately, and getting an unexpected letter from their credit card companies saying, your interest rate is going up and by the way, your credit limit is going down.

Why, when the Federal Reserve interest rate is at an all-time low, and when banks are getting bailout money- is this credit crunch reaching our mailboxes? Many say it's because the next bubble to burst in our ailing economy is the credit card bubble.

The index that tracks the charge-off rate, the amount of uncollectable debt that credit card companies have given up on, has hit record levels. Delinquencies, which represent credit card accounts more than 60 days past due, are said to have increased 35 percent in the last five months.

In addition to what such statistics mean to the economy, they can be personally devastating for people who are unable to borrow, because they've maxed out, or defaulted and destroyed their credit rating.


Manuel Navarro, certified consumer credit counselor for Consumer Credit Counseling Service of San Diego (CCCS), the largest nonprofit credit counseling agency in the United States.

Rob Seltzer, a certified public accountant, and a representative from the California Society of CPAs. Rob is also a personal financial specialist based out of Beverly Hills.

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