Five ways to conquer credit cards

Scenario Two: A credit card company has offered to pay off all your old credit card debt at nine per cent if you switch. Call your old companies and tell them the deal you've been offered; ask if they can do better, and go with whichever is lowest.

If you have a limited budget for debt reduction, write letters to each of your creditors acknowledging the situation, and tell each one when you can begin repayment. They'll appreciate your openness and will likely be a lot nicer to you. You'll earn some breathing space (something we all need when we're dug in deep), and dealing rather than hiding will help boost your bruised self-esteem.

If you have a limited budget for debt repayment, write down what you can pay each creditor each month. Work it out.

A final note on dealing with creditors: Keep your cool. It will make you feel better. And remember, some creditors have been taught to be mean and nasty. Don't be intimidated. You have figured out a plan and are truly attempting to deal with your situation.

Quick checklist:

1. Pay more than the minimum due.
2. Organise your finances.
3. Negotiate the best deals with credit card companies.
4. Allocate funds to your creditors in proportion to how much you owe.
5. Stay cool.