SUZE ORMAN Q&A

First things first: Stop feeling guilty.

- ASK SUZE ORMAN

Q I feel guilty over racking up credit card debt over the holidays. What's the best way to start paying it off?

SUZE: You can’t undo December, but you can take charge of January. The smartest move isn’t to panic or throw random payments at your balances. It’s to get strategic and make sure every dollar works as hard for you as possible. Here’s how!

1. Get the lowest interest rate

Before you send a payment, ask your credit card companies if they'll lower your interest rates. Many of them will say yes—especially if you've been a longtime customer who pays on time. Even a small decrease will save you real money. Next, see if you can transfer your balance to a lower-rate card. Some banks offer 0% balance-transfer promotions for up to 21 months. That's like getting a year and a half of breathing room.

2. Stop using your cards

Take every card out of your wallet. Put them away, wrap them in rubber bands or freeze them in a block of ice! You can’t fix a problem while you're still feeding it. From this day on, all spending comes from your checking account. When you pay with cash or debit, you feel every purchase—and that awareness is power.

3. Create your payoff plan