The average UK adult with debt holds £3,700 on credit cards at an average APR of 24.7%. At that rate, making only minimum payments means you'll pay nearly double the original balance before you're free. There's a better way.
First: stop adding to your debt
No payoff strategy works if debt keeps growing. Before anything else: freeze your credit cards (literally, or digitally disable contactless), switch to a debit card for daily spending, and build a small emergency fund (£500–£1,000) so you're not forced back to credit for surprises.
Strategy 1: The Avalanche (highest APR first)
Pay minimums on all debts. Throw every extra pound at the debt with the highest interest rate. When it's gone, roll that payment to the next highest rate.
Saves the most money. Mathematically optimal. Credit cards at 24–40% APR should almost always be avalanched first.
Strategy 2: The Snowball (smallest balance first)
Pay minimums everywhere. Attack the smallest balance regardless of interest rate. Each cleared debt gives you a psychological win that research shows helps people stay on track.
Keeps you motivated. If you've tried and failed to pay off debt before, snowball may help you build momentum.
Strategy 3: 0% balance transfer
If you have good credit, transferring credit card debt to a 0% balance transfer card can save significant interest while you pay down the principal. Key points:
- •Transfer fees typically 1–3% of balance — worth it at high APRs
- •0% periods typically 12–30 months — set a calendar reminder for the end date
- •Miss one payment and you may lose the 0% rate — set up a direct debit
- •Don't use the new card for spending
Strategy 4: Debt consolidation loan
A personal loan at 8–12% APR to pay off credit cards at 24–40% APR makes mathematical sense — you're buying a lower interest rate. Risks: you haven't solved the spending behaviour, and you've converted unsecured debt to a fixed obligation. Only consolidate if you've addressed the root cause of the debt.
UK-specific: what about student loans?
Don't include Plan 2 student loans in any payoff strategy. They're income-contingent, written off after 30 years, and the effective interest cost for most graduates is negative (you pay less than you borrow in real terms). Overpaying Plan 2 is almost never financially rational.
See your debt-free date
Use our free UK debt payoff calculator to model both avalanche and snowball with your real balances and rates — and see exactly what month you'll be debt-free.