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3 steps to start paying debt

Americans have been working hard to pay off their debt in the last few years. The average total owed on major credit cards dropped to $4,699 toward the end of last year, from $5,776 in early 2009, according to credit reporting agency TransUnion.

But that's still a significant burden to bear -- and that amount doesn't include mortgages, home equity loans, car loans, student loans or other personal loans, or store-issued credit cards.

That's why paying down debt remains one of the most popular New Year's resolutions. But reaching that goal requires a plan.

Here are three steps to get you started:

*Put away the credit cards. You can't pay off debt if you're still accumulating it, so make a point of leaving the cards at home and use cash.

*Prioritize the order you want to pay various debts. Although paying off the balance with the highest interest rate first will result in significant long-term savings, paying off the smallest debt can provide a psychological boost to help fuel your desire to achieve the goal. Or choose to pay off the debt that bothers you most for a different sort of boost. Check out smartphone apps like Debt Payoff Planner or Debt Free for guidance and to track your progress.

*Use unexpected windfalls and any tax refund to help you take big chunks off the total. It's not as much fun as spending it all on a vacation or a new flat-screen TV, but you'll get more satisfaction in the long run out of becoming debt free.

For more information, consider seeking help from a nonprofit credit counseling agency. Find one near you at