Step 1: Calculate debt and get your credit score
After doing the math, Sally and Dan discover they have $43,521 in credit card debt. What's even worse than the debt, explains David, are the sky-high interest rates. With an average interest rate of 20 percent on their credit cards, the Egglestons are looking at $8,704 in yearly interest payments. On top of that, the Egglestons are getting hit with thousands of dollars a year in miscellaneous credit cards fees, including late fees and over-the-limit fees.
Step 2: Track your spending and find extra money to pay down debt
David finds some hidden costs that are sinking Sally and Dan further into debt, such as unnecessary cancer and accident insurance that's costing them $1,056 a year. David calculates that the Egglestons are spending $500 more per month than they are bringing in.
After taking a tough look at their finances, Sally breaks down. "The whole thing just makes me feel really stupid," says Sally. "I feel bad that I got my family into this whole stupid thing. I got my family in so deep. I feel like this has killed my credit."