There is billions of dollars of outstanding debt owned by consumers in the United States. Many consumers have tens of thousands of dollars in credit card and other debt. There are four simple methods that can be used for debt reduction.

Consumers can consolidate their credit card debt by using a credit card balance transfer. Often, consumers who have a large amount of credit card debt want to transfer their balance to a lower interest rate. Customers who qualify for a new card may be able to transfer their outstanding balance. However, individuals should check to see any fees that may be assessed for a credit card balance transfer. Also, promotional interest rates are very effective to assist with outstanding debt. However, consumers must pay off their balance within the promotional period or face a steep increase in their rates.

A home equity loan or home equity line of credit is another option for individuals looking to consolidate debt. Individuals who have paid down their mortgage for several years are likely to have built up equity within their home. A home equity loan and a home equity line of credit are not the same. A home equity loan is for a set amount of money. A home equity line of credit allows borrowers to access a set amount as often as they wish. Individuals should understand the different rates and options available to them with a home equity loan or home equity line of credit.

Debt consolidation companies are another method that can be used to consolidate debt. Many individuals use a debt consolidation loan that is provided by a company instead of a lender. While these loans often are easier to qualify for, they will charge higher fees as well as offer lower limits than a loan through a bank or credit union may offer. Individuals who wish to pursue a debt consolidation loan are better off applying at a bank or credit union that offers lower interest rates and fewer fees.

Borrowing from a life insurance policy can be another tactic to consolidate debt. Individuals should use other methods before resorting to borrowing from their life insurance. Individuals who own a life insurance policy can use the equity they have built up within the policy to pay down their debts. Borrowers should repay the loan to ensure that the death benefit will be paid out to the beneficiaries. Failing to repay the loan could cause the death benefit to be applied to the loan. The beneficiaries could be left with little or nothing to assist them after the insured party passed.