Getting the debt monkey off your back is probably the single most important thing you can do to put your fiscal house in order. This paves the way toward lower interest rates, lower monthly payments and a general lowering of anxiety.
But what's the best way to get there? As with diets and workout regimens, there's no one-size-fits-all answer.
Still, I'd be wary of any company that wants to charge recurring fees to help lower the amount of money you owe — particularly when that company explicitly says it will do virtually nothing to assist you.
I'm looking at a brochure for something called Debt Wise. It's a product from Equifax, one of the three leading credit reporting bureaus. "Get out of debt faster," the brochure says.
But the fine print, which is in smaller, lighter type, makes clear that any results "all depend on you." It says that "Equifax will not negotiate on your behalf with your lenders and creditors to obtain new or different loan or credit terms for you to eliminate, reduce or settle your debts."
It also says that "Equifax does not imply, promise or guarantee that Debt Wise will or may improve your credit record, credit history, credit rating, credit score or debt-to-income ratio" and that "adverse credit information based on your past credit behavior cannot be changed."
So what is Equifax offering?
What it's basically selling is an online tool that it says will help prioritize your debts so you can pay them off in a manageable way. All for just $14.95 a month.
This is something that people can easily do for free, and many people use a similar approach called the "debt snowball" method. More on that in a moment.
First, I asked Equifax why it's come out with Debt Wise.
"We've got a lot of debt in this country," answered Dianne Bernez, a senior Equifax vice president. "We definitely feel the need as a company to offer a tool that helps people get out of debt."
Indeed, consumers were carrying about $2.4 trillion in debt as of November, according to the Federal Reserve. Nearly $800 billion of that amount was credit card debt.
Bernez likened Debt Wise to Weight Watchers — a program that helps people take responsibility for their own behavior.
"This is about getting yourself on the road to financial freedom," she said.
And I'd believe that if Equifax hadn't cluttered Debt Wise with additional features that the company can keep billing you for, such as daily monitoring of your credit file and up to $25,000 in identity theft insurance.
Those are things that should be (and are) sold separately. If Equifax were serious about helping people manage their debt, it would make a plain-vanilla version of the online tool available to consumers at little or no cost.
This seems like the least it can do, considering that its profits depend almost entirely on controlling access to millions of people's credit records, whether we want them to or not.
So far, Equifax is the only one of the three major credit bureaus to offer a debt-management service. But considering how these guys usually move in lockstep, I wouldn't be surprised if rivals Experian and TransUnion introduced their own products before too long.
Bernez said Debt Wise uses a proprietary algorithm to weigh the size of each debt, the interest rate and other factors to determine a suitable order and pace for consumers to pay off obligations. "You're able to face debt squarely in the face," she said.
While there's undoubtedly some value in presenting people's debt in an eye-catching fashion with accompanying charts and graphs, this is by no means the only way to get your hands around your finances.
"You could just as easily do this with a yellow pad," said Dave Ramsey, a financial radio host who has long championed the debt snowball method. "It's not rocket science."
The debt snowball approach doesn't rely on any fancy algorithms or computer graphics. What it entails is listing all your debt from smallest to biggest. If two debts are about the same amount, the one with the higher interest rate comes first.
You commit to at least making the minimum payment every month for each obligation. Then you take as much as you can that's left and apply it to the top debt on the list until it's paid off. After that, you focus on the next debt.
The idea is that as each obligation is dispatched, more money will be available for the next creditor on the list, and so, like a snowball rolling downhill, a growing amount of cash will be dedicated to ridding you of debt.
You could argue that tackling higher-interest debt first makes more financial sense. But proponents of the debt snowball method say they like the psychological boost that comes with eliminating creditors quickly, regardless of rates.
In any case, it's harder than it looks.
"You've got to change your life," Ramsey said. "That's what gets people out of debt. There's no short cut to any place that's worth going."
But if your problem is that you owe businesses too much money, chances are you don't need all the bells and whistles that Debt Wise offers, just as you can probably live without daily credit monitoring and ID theft insurance.
What you need is to come up with a workable debt-reduction plan and stick with it. I'm not saying the debt snowball approach is best, but it has an elegant simplicity that's very attractive.
And it won't cost you $14.95 a month.
David Lazarus' column runs Tuesdays and Fridays. He also can be seen daily on KTLA-TV Channel 5. Send your tips or feedback to firstname.lastname@example.org.