Debt can quickly overwhelm your finances. As a nation, however, we're not quite as buried in debt as you might think.

According to statistics from myFICO, about 40% of Americans who hold credit cards have balances of less than $1,000. And further, nearly half (OK, 48%) of consumers carry less than $5,000 of debt when you count everything -- car loans and the like -- except mortgages.

On the other hand, those same stats indicate that about 15% of credit card holders have balances over $10,000, about 37% of consumers have total non-mortgage debt over $10,000, and around 15% of credit card holders are using 80% or more of their credit card limit.

That's not so good. If you're one of those 15% with $10,000 or more in credit card debt, consider this: $10,000 of credit card debt, at a typical credit card interest rate of 18%, is costing you $150 a month. Take that $150 each month and stick it in an index fund returning 10.5%, and after 30 years you'd have more than $380,000.

It's your call: endless debt service, or almost $400,000 more at retirement? Put another way: Would your rather send that $400,000 to your retirement fund or to the credit card company's?

The choice is pretty clear, isn't it? Let's look at strategies for attacking that debt.

Moving the mountain
That mountain of debt may look intimidating, but it's almost certainly a solvable problem. It'll take some effort, and it'll take some patience, but it can be dealt with -- if you have a plan. A good plan looks like this:

Step 1: Stop adding to the pile!
Before you can reduce your debt, you've got to stop adding to it. Start tracking your monthly spending, and look for ways to keep it below your monthly income. Those ways should be realistic -- eating saltines and peanut butter for lunch every day may save you $80 a month on paper, but nobody is likely to stick with such a plan for very long. Look for easier shifts instead, like buying your name-brand clothes at discount retailers like TJ Maxx and Marshalls.

Step 2: Ask for lower rates
Speaking of slowing the rate of increase, did you know you can often get lower rates on your credit card debt just by asking? Yes, really. Call up whoever issued your cards and tell them that you'll transfer your balance elsewhere unless they bring your rates down below 12% or so. Take a few hours off from work, sit down, and call 'em all, one after the other. Many people on our discussion boards have had great success in negotiating with a variety of card issuers, including American Express (NYSE:AXP) and Bank of America (NYSE:BAC). You've got nothing to lose, and could gain $100 a month or more.

Step 3: Consolidate your debt
No, don't go running to one of those "credit repair" services -- at least not until you've exhausted other options first. The goal here is to get all of your debt in one (hopefully low-interest) place, so that you can attack it with maximum efficiency.

  • Transfer your balances. If your credit score is decent, you probably get credit card offers in the mail all the time. Many of those will include offers to transfer existing balances to the new card at a very low rate. Read the fine print, and as long as you aren't going to end up worse off than you are now in the long run -- like, if the rates on transferred balances balloon to something crazy after a set period -- give it serious consideration.
  • Borrow from your 401(k). Most retirement plans allow you to take loans against your balance. If you can get a loan big enough to cover all of your credit card debt, give this one strong consideration. You'll lose out on capital appreciation on the borrowed money, and you'll have to pay interest, but you'll be paying that interest to yourself -- at a much lower rate than the credit cards are charging, most likely.
  • Borrow against other assets. This should be a last resort. Turning unsecured debt into secured debt is a great way to lower your rates, but it exposes you to some nasty consequences should you fail to make the payments. If you do use a home equity line or a loan on other assets to consolidate your credit card debt, make sure you can leave a margin of error for emergencies -- in other words, make sure you're not maxing out that HELOC. Nobody likes the credit dings you'd get if you had to skip a payment on your credit cards, but they beat losing your house.

If you've gotten this far, congratulations! You may not have slain the monster yet, but you've got it cornered, and you know you'll be able to deal with it from here on out. That's the key to getting -- and keeping -- a grip on your debt.

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Fool contributor John Rosevear invites you to send him your comments, questions, and ideas. He does not own stock in any of the companies mentioned. Bank of America is an Income Investor recommendation. The Motley Fool has a disclosure policy.