A credit card, if chosen carefully and managed responsibly, can be a useful source of funds in unexpected or emergency circumstances. However, for many consumers, the temptation to "spend now, pay later" extends beyond necessary purchases to unnecessary, or luxury, purchases that they would not otherwise be able to afford. This effectively means that they are living beyond their means and often results in one, or more, credit cards being used up to their limit(s), and a level of debt that cannot, realistically, be repaid in full.

Many credit card companies offer 0% interest on balance transfers for an introductory period %u2013 typically up to 12 months %u2013 but the APR ("Annual Percentage Rate") thereafter is usually over 15% and may be over 40% in the worst cases; this may lead, ultimately, to credit card debt spiraling out of control.

How to Reduce, or Eliminate, Credit Card Debt

Credit card debt is a debt, after all, and, with the exception of a formal IVA ("Individual Voluntary Agreement") %u2013 which may result in a proportion of the debt being written off %u2013 there are few methods by which an existing debt can be reduced or eliminated. This does not mean, however, that credit card debt cannot be moved from one credit provider to another, at a preferential interest rate, so that the amount of interest accrued, from now on, is reduced.

One method of doing so is to take out a debt consolidation loan%u2013 either unsecured, or secured on your home, depending on you circumstances %u2013 which may offer not only a lower APR, but also lower monthly repayments than your current credit card(s). A debt consolidation loan does, of course, require regular fixed monthly repayments and your home may be at risk if you do not keep up the repayments on any loan secured against it.

You can also, of course, take advantage of the 0% balance transfer deals available from many credit card companies to switch your debt between providers at regular intervals, and therefore avoid paying interest at all in the best case scenario. Bear in mind, however, that a debt, even at 0% is still a debt, and switching between providers does not reduce the monthly repayment required, but does reduce the length of time required to pay off the debt in full. If you have debts on more than one credit card, you can use these 0% balance transfer deals, and a technique known as "snowballing" to your advantage.

Snowballing involves transferring as much of your credit card debt to 0% balance deals, paying of as much as you can monthly on the card with the highest APR %u2013 whilst making minimum payments on the others %u2013 until the debt is paid off in full, and so on for the next, and the next, until all your debts are discharged.

If your credit rating is poor, and no possibilities for restructuring your credit card via a loan, or balance transfer deal, exist, you may need to approach the credit card provider, directly, or via an insolvency practitioner, or debt counselor, with a view to reducing your monthly repayments. This usually involves the preparation of a personal budget, in order of priority, to determine repayments that are reasonable, from the point of view of the credit card provider, and affordable.