Ten steps for digging out from debt, from consolidation to financial advice.

The average American pays more than $450 a year in interest fees to carry a balance of $2,500 on two to three bank credit cards, according to recent estimates. And credit card companies are tacking on new fees and raising interest rates that make it even more expensive.

If you carry credit card debt, paying it off should be your top financial priority for two important reasons.

First, it gives you a guaranteed rate of return of as much as 21%, depending on the rate charged by the credit card issuer. So paying off $2,500 at 16% yields a 16% return on that money.

Second, paying off debt gives you flexibility. If you're stretched to the limit on your credit cards, you have no margin for error; no room to maneuver if you have an emergency. Paying down debt frees up your cash flow and gives you the opportunity to take advantage of a compelling career move -- or a great vacation.

10 steps to debt freedom

1. Figure out how much you owe. Gather all your credit card statements and make a list that includes the interest rates, total amounts you owe and minimum monthly payments. List the cards by the interest rates they charge with the highest rate first and so on. "A lot of people lose track of what they owe!

2. Keep the two cards with the lowest rates. Cut up the others. Write to the card issuers and close the accounts. (One caveat: Check the terms of use before you cancel. Some credit issuers charge higher interest rates on the remaining balance due to people who close their accounts. If this is the case on one of your cards, pay it off and then cancel.)

3. If you don't have a card with an interest rate of less than 14%, get one.

4. Resolve that you will use your cards only for essentials over the next six months. For other purchases, use cash or a debit card.

5. Add up your minimum monthly payments. Credit cards often require very low minimums. Follow them and you will be paying forever. For instance, if you owe $1,000 on a card with a 17% interest rate, experts say it might take you 12 years and cost you $979 (in addition to the principal) to pay it off if you make only the minimum payments.

6. Calculate how much you can pay over the minimum. Really stretch your budget. For instance, let's suppose the minimum payments on your credit cards total $350 a month. What could you pay if you really stretched? How about $750? No pain, no gain.

7. Apply all of your additional repayments to the card with the highest rate. If two cards have the same rate, put the additional money on the card with the largest balance.

8. Consolidate your debt. Many credit card issuers offer introductory rates as low as 3.9% for six months. If you're really serious about getting out of debt in a hurry, transfer your largest, high-rate balances to a card with an extremely low rate and pay them down aggressively.

9. Pay the minimum on your lowest rate cards until you've paid off the balance on the more expensive cards.

10. Consider using your savings to get out of debt. Sure it sounds harsh. But if you put together a balance sheet, your debt would cancel out your savings anyway. If they're in the bank, you're probably earning just over 3.2% to carry debt at 18% or more. Once you've paid off the balances, you've got to be serious about staying debt-free. If you lack self-discipline, consider using a debit card. Otherwise, pay as you go -- the entire balance on each card when it comes in.