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There is no one-size-fits-all approach to consolidating debt.However, there are some very important steps to take to find the best debt consolidation tactic.With so much debt and different types of debt, it can be very confusing to find a debt consolidation tactic that fits your financial situation.Did you know that more than 50% of the US household have credit card debt?The total credit card debt is about $760 billion, and the average borrower balance (for those with credit card debt) is $5,400.However, credit card debt isn’t the only type of debt.The chart below, taken from the NY Federal Reserve’s Regional Household Credit Snapshot shows the percent of consumers that have five different types of loans, as well as the average balance for those who do have loans.Remember, this does not include other bills and debt, such as medical debt.



Is your debt helping you increase your overall financial well-being?For example, instead of renting did you buy a home?Your home mortgage loan is a great way to build equity and live in a home of your own.However, if you are building up a lot of personal debt, including credit card debt, then most likely you are either in a financial hardship, or mismanaging your finances.

Instead of building equity, you are paying lots of interest to service your debt.

Before you start to consolidate your debt, take these three preliminary steps to ensure that you understand your financial situation: Consolidate Your Debt to Meet Your Goals A smart next step is for you to define your goals.