With Americans living beyond their means and continually over-extending themselves, people are finding themselves in more debt that ever. With a credit crunch looming, it’s important to start taking the necessary steps to start eliminating debt. First things first, you should examine how you got into debt, and start making a plan for your future. Then, there are a few things you can do to lower interest rates, and consolidate them into one lower payment.

If your total debt is not all that large, a new balance transfer credit card could be a lifesaver. Assuming your credit is still rather good, you may be able get a new card and receive 0% APR interest for up to 15 months. Make sure that you get a balance transfer credit card with no fees attached on the transfers.

This method will only work, however, if you look at the new credit card as a tool to get out of debt, and not as a way to get more credit. Once you put your other credit card debt on to the new credit card, you want to close out some of those other credit card accounts to avoid repeats. If you cannot control your spending with credit cards, then this is not the option for you.

You will also want to take advantage of the 0% interest rate while you can. The best way to do this is to pay as much as can each month while you have the introductory offer. This will quickly reduce your principal enabling you to use the balance transfer credit card to your best advantage. Be careful not to make any late payments, since only one can cause you to lose this benefit and be put into a higher interest category.

Another similar option would be a personal loan. A personal loan can be rather easily obtained as long as you are working. There are two kinds of personal loans, and one is better than the other. A secured personal loan will require that you put up some collateral, but it will give you better interest rates and longer terms of repayment. Since you want to reduce your debt as much as possible, this is probably the better way to go.

An unsecured personal loan does not require any collateral, but may not allow you to get much money, either. These loans are also called signature loans, and they are also available if you have bad credit.

Finally, if you have larger amounts of debt and own your home, a home equity loan may be the way to go. They typically charge interest rates that are less than half what most credit cards charge. Plus, the interest you pay in most instances is deductible. If you can, refinance your first mortgage for the best interest rates and no additional payments. Cash out mortgages are probably your best deal. Second mortgages will give you higher interest rates, shorter repayment terms, and add a new payment to what you already have.

The down side, is that when you refinance, you will incur fees up front. Also, if you default on your home equity loan payments, you may lose your home. So, although this is a solid option for certain people, it should be approached carefully.

For any of these options for debt consolidation, you need to shop around some to make sure you get the lowest interest rate possible. Get several quotes and then compare all terms carefully. Before long, you will be able to find the best deal for your debt consolidation needs and be able to start fresh.