I have several friends who are getting their children ready to head off to college. And before their kids leave, many of them are being entrusted with a credit card for the first time—an important milestone!

Incredibly, many of the students heading off to college this fall have never had their own credit card, and they have little knowledge about handling this new responsibility. Without instruction or experience, the privilege sometimes goes awry, with the student racking up a credit card balance that they’re unable to repay.

Debt is a problem that doesn’t just affect new college students. Vanguard recently did a webcast on women and investing, and one of our most popular questions was about how investors can pay back debt and fix their credit while juggling competing demands on their financial resources. As the popularity of this question suggests, debt is a common occurrence since the financial crisis. In fact, Vanguard Chief Economist Joe Davis discussed the issue of consumer debt in his January 2014 research paper. He pointed out that consumer debt is past the very high levels it reached post-financial crisis, but the worst is not yet over.

Identify if there’s a problem

The first thing to realize is that you have to address debt head-on. Having debt that you’re unable to repay can make it hard to take out a loan or get utilities, and it will certainly affect your credit history. And there’s no question that unmanageable debt will affect your investing life.

Not all debt is “bad.” For example, a mortgage can provide tax advantages and replace rent you would otherwise pay. The problem really arises when someone takes on too much debt by charging too much or borrowing more than he or she can realistically repay. But for most people, becoming debt-free can be challenging.

Be aware of the warning signs that you’ve taken on too much debt:

  • You’re unable to make your minimum payments. (This is especially relevant to students with new credit cards.)
  • You’ve reached the limits on your credit cards.
  • You’ve found that you’re unable to obtain new credit because of a bad credit report.

For those with other types of debt (such as a mortgage, car loan, or lease), be mindful of the ratio of your debt to the amount of income you make. Start by identifying your debts and method of repayment. Track your credit card statements and any loan documents. Keep tabs on the amount you owe, the interest rate charged, and your required minimum payments. While this might be uncomfortable, it will put you on the right track.

Take action

If you find that you have too much debt, there are steps you can take. First, build a budget to monitor your spending and get back on the path toward long-term saving and investing. Make sure you factor in your credit card debt and pay all required minimum payments in full.

There are other strategies you can use to reduce your debt burden. You can pay more than the minimum amount due or ask your credit card company for a break on the interest rate. If you’re a good customer with a strong credit history, they might be inclined to grant your request. Reducing the interest rate on the card could save you a significant amount over time. And as a last resort, you could even dip into your savings to reduce your debt (but make sure you keep enough in your emergency fund just in case).

The most important thing to do when you have debt is to have a plan. Once you get your budget together, make a list of the steps you’ll need to take to improve your financial situation. You may also want to consider getting assistance from a financial advisor, who can help you with your plan and encourage you to stick to it. And remember, once you’re on the path toward debt reduction, you’ll reap benefits in multiple ways.