Now, how do you get those debts down? We've divided our advice into two parts. Debt Clinic Part I is Debt Management 101, for everybody. Debt Clinic Part II is for those whose debts are out of control. Read both sections even if you aren't in dire debt. Knowing what could happen might be enough to send you tearing up credit cards left and right. That, by the way, is a good thing.

Debt Management 101

Here are the first steps you need to take to get your debts under control:

1. Make more than the minimum payment. An extra $10 a month can make a world of difference. 47% of credit card customers are making only minimum payments on their credit cards. Don't get caught in this trap.

Dolan Smart Money Move: To make sure you get the most bang for every extra buck you pay toward your balances, put the extra money toward the card with the highest interest rate first. (This will actually eliminate your debt faster than paying off the card with the highest balance.)

2. Pay off non-tax-deductible debt first. If you're paying 18% interest on your credit card balance, you'll make a bigger dent in your debt by paying off that nondeductible credit card debt rather than prepaying your mortgage. The same holds true if you prepay–or pay off–a car loan or personal loan (both nondeductible) rather than your mortgage.

3. Prepay whenever possible. To prepay, just send the extra money (or do it online) and specify in a note or as you pay online that the money is to go toward your principal. (Be sure your loan agreement says you can do so without penalty.)

Dolan Smart Money Move: Ignore the old argument that says you shouldn't prepay because you lose the tax deduction on the interest you pay. Let's say you don't prepay and spend $1,000 on interest. Sure, that $1,000 gives you a $280 tax deduction (if you're in the 28% tax bracket)... but you still spent another $720 on interest you could have saved by prepaying!

4. Clean out your wallet. Americans have gone credit crazy! Most people today have an average of 14 credit cards. You really need only two or three, so apply scissors liberally. (Click here to learn the right way to cancel your credit cards.)

Dolans Smart Money Move: Which cards should go first? Say goodbye to your department store cards. They usually charge outrageous interest rates—and almost any store today will accept MasterCard and Visa. Granted, sometimes the stores tempt you by offering all you can buy at 15% off on the day you start credit with them. If you're really a smart shopper, you'll do this only if you can pay off the debt at the end of the month.

One gasoline card (for emergencies) and one or two major credit cards plus an American Express card are more than enough. If you're part of a couple, the two of you should have just three or four cards between you: one Visa, one MasterCard, one AmEx, maybe one extra in your own name. What else do you need? (Check out Dolan Do's for Choosing the Right Credit Card.)

If you are overspending the limits on those three cards, you're probably headed for trouble if you aren't already there. Always think about how much the monthly payment adds up to over a couple of decades. What if that money was going into your retirement account instead of the credit card company's profit account?

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