If you are contributing to the $950 billion worth of outstanding credit card debt in America, you need to start digging your way out, and the sooner the better. Debt can stand between you and your financial goals, such as sending loved ones to college and retiring in comfort. It may take months or even years, but becoming debt free is your first step to true financial freedom. It is also a prudent move for individuals who are nearing retirement.

Get aggressive. The best approach to paying off debt is to become systematic and aggressive. Start with the card with the highest interest rate, and double or triple your monthly payments until you eliminate your balance. Then do the same thing with the next highest interest rate card, and so forth.

Pay debt first, invest later. Conventional wisdom states that if you can earn a higher after-tax return on your investments than the interest rate you are paying on your debt, you should invest. Otherwise you should pay off your debt.

As an example, say you have a credit card balance of $8,000 with a 14 percent interest rate. Given current market performance, paying off the card before investing seems obvious. But even if the stock market was experiencing an annual gain between 8 percent and 9 percent, paying off debt would still be your better bet.

Ask for a lower rate. You can accelerate the pay-down process by calling your card issuer and asking for a reduced interest rate. According to a survey conducted by the U.S. Public Interest Research Group, more than half (57 percent) of those who called and requested a lower interest rate were successful. On average, the rate was lowered between 7 and 10 percentage points.

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Debt Reduction Important Step To Financial Freedom