The debt diet: Top tips to become debt free

NEW YORK (WABC) -- First, the bad news. The average household owes nearly $16,000 in credit card debt.

Top advice from TheStreet.com's personal finance contributor and resident debt doctor, Scott Gamm? Eliminate bank overdraft fees.

"That's a fee that's charged when you don't have the money in your account to complete a transaction," said Scott.

Scott said the average person has seven overdraft fees each year. And that could mean hundreds in hard earned cash down the drain. The cure is bank apps that track your balance.

"You get text alerts when your balance falls below a certain point," said Gamm. "That's important."

Also important is your credit score. A low one can cost big bucks in higher interest. The first step to boost your number, don't charge more than 30 percent of your credit card's limit.

"If you have a card with $1,000 credit limit, don't charge more than $300 and you really want to pay off that balance every month," advises Scott.

That might be easier said than done. So what if you're like the vast majority with thousands in debt. Scott said the biggest tip to getting out of debt is simply pay double the minimum payment on your credit card bill. "We found that regardless of how much you owe. (If you) double the minimum payment, consistently, you'll get you out of debt in two years."

And once you're out of debt, a bonus tip, start contributing to retirement accounts like a 401(k) or Roth IRA.

"If you're in your 20s or 30s, you won't need that (retirement) money for 30 years," said Gamm. "So you'll benefit from compounding interest over time."