After 31-year-old Michelle R. Phillips of Dallas graduated from law school in 1999, she watched many of her colleagues at the law firm where she worked adjust to their salaries by spending lavishly on wardrobes, traveling, and pampering themselves. But Phillips couldn't participate in the spending sprees. She was still struggling to pay off the $12,000 in credit-card debt--spread over ten cards--she had accumulated in college. "At one point I was unable to pay even the minimum amount due, and I wasn't applying anything to the principal," she says.

Debt has become a deadweight on an increasing number of African-Americans, according to "Costly Credit," a recent report by the public-policy organization Demos. The study found that nearly 20 percent of credit-card-indebted Blacks who earn less than $50,000 are in debt hardship, which means 40 percent of their income goes to debt payments.

But Phillips was determined to set herself free. She and three other now-debt-liberated sisters share their strategies for achieving financial freedom:

TAKE IT ONE STEP AT A TIME. Phillips began reading books on debt reduction and called her creditors and negotiated better terms. She had taken part-time jobs while in law school and put herself on a strict budget. "When people invited me to go places, I'd say no," she recalls. "I would grocery-shop instead of eating out. And I made do with the clothes in my closet." With the money she freed up from cutting back, she tackled the cards with the highest interest rates first, often tripling the minimum payment. She made a list, and when she paid off a bill, she'd cross it off and apply that money to the card with the next highest rate. It took Phillips six years to get out of the red. Now she uses one credit card for major purchases and is having her first home built. "I changed my philosophy because being in debt felt like being in prison," she says. "Today I feel free."

FREE UP FUNDS. A few years after a divorce, Diann Jenkins of Peachtree City, Georgia, found herself in a $40,000 hole, dug mostly by credit cards. A Sunday-school lesson on financial management made her realize that sacrifice is a prerequisite to becoming debt-free. She and her daughter, who was 28 at the time, decided to tackle their obligations together. Because Jenkins and her daughter spent most of their income on housing, they moved in together to free up money. "I sacrificed my independence and the freedom of living in my own place by myself," she says. "There were times when living with my daughter wasn't easy--we had different lifestyles. But I was willing to make those sacrifices." Jenkins, 50, also focused on first paying off the card with the highest interest rate. In two years she had paid off her bills and was financially ready to live on her own again. Today this CEO of a nonprofit organization is living in the house of her dreams. "I was able to buy a $360,000 house because I was debt-free," she says.

TRIM THE FAT. Seven years ago 33-year-old human-resources professional Marl K. Harris of Austin, Texas, came to the realization that she couldn't pay her bills if she left her job to go back to school. And that realization motivated her to clear nearly $30,000 of debt. "I felt trapped," she says. To pay off seven credit cards with an average 20-percent interest rate, Harris got a consolidation loan from her bank, qualifying for an 8.5-percent interest rate. "I only had to pay one bill," she says. "And I received an amortization schedule with the consolidation loan, so I had a timeline for seeing my debt reach zero." In order to pay more than the loan's minimum payment, she canceled cable TV, stopped eating out, and switched to a low-cost phone-service plan. She only bought necessities and paid for everything in cash. In four years she had paid off the debt. After Harris was debt-free, she didn't change her spending habits and today saves about 35 percent of her salary. "I had become so disciplined that I felt it was easier to funnel those funds into a savings and investment strategy," she says.

TAP YOUR ASSETS. Until she was laid off from her job in 2003, Mary Rogers of Oxon Hill, Maryland, never had a problem with debt. But by the time she found a new job in her field of human-resources information technology 13 months later, she had acquired about $10,000 in credit-card charges. Rogers, 42, weighed the pitfalls and benefits of tapping into her biggest asset--her home--to pay off her bills. "I refinanced and took the equity that I had in my house because it had tripled in value since I bought it," Rogers says. The debt was now part of her mortgage balance, so the interest was tax-deductible. But not all experts recommend this strategy, because if you use the equity in your home to pay off credit-card bills but don't change your spending habits, you may end up over your head in debt again and risk losing your home. It's better to liquidate assets you own outright, like a second car. But Rogers was adamant about not running up her charge cards again. "Today I have no credit-card bills," she says. "I still have a credit card for traveling purposes, but if I charge anything, I pay it off that month."