• If you use more credit than you can pay back, you will have to work with your credit card company to eliminate the debt.credit card and hand image by Warren Millar from Fotolia.com
  
  Credit cards are often more convenient than carrying cash or writing checks. But the temptation to "buy now and pay later" can get you in trouble, particularly if you encounter financial setbacks. The best policy is to limit your charges to an amount you can pay off at the end of the month. If you do overuse your credit card, however, and find yourself unable to pay off much more than the monthly interest payment on the debt, most companies will allow you to use standard debt reduction programs to get your head above water.
  
  

Debt Negotiation

• Debt negotiation is a process in which the debtor's representative negotiates a lower rate and more favorable terms for debt repayment. The debtor pays a debt resolution company to negotiate on his behalf. Often, the credit card company cancels part of the debt or lowers monthly payments in exchange for timely payments. The Federal Trade Commission looks unfavorably on debt negotiation companies that collect money from clients before they successfully negotiate the debt. Debt negotiation programs are ideal for debtors who prefer not to deal with creditors themselves. However, debtors should check out these companies carefully to ensure they use ethical methods and negotiate favorable settlements.
  
  

Lump-Sum Settlement

• If the debtor has a significant amount of money saved towards paying off the debt, a lump-sum settlement may be an option. In this type of settlement, the debtor agrees to pay a certain amount of money to satisfy the debt. This amount is lower than the total debt owed. The debtor usually pays the money all at once, although some credit card companies will allow her to break it into two or three installments.
  
  

Workout Arrangement

• A workout arrangement program is a program in which the credit card company suspends late fees and interest on the debtor's past balance. Usually the debtor cannot use the card for further purchases until the balance is paid. Some credit card companies offer temporary workout arrangements (i.e., suspend extra charges for two months) while others offer a permanent arrangement until the balance is paid off.
  
  

Debt Consolidation

• Debt consolidation is a program in which one company assumes the debt from several credit card companies. The debtor then pays one monthly fee to the consolidation company. Consolidation fees are often lower than the total amount paid to several credit card companies. Debt consolidation companies can charge interest and late fees if debtors fail to make their payments on time.