Managing debt effectively starts with understanding what you owe, what it costs, and which debts to tackle first. Whether you have credit card balances, an overdraft, or multiple debts across different lenders, a clear repayment strategy can save you significant money in interest and get you debt-free faster.
If debt is causing you serious stress, free confidential help is available from StepChange (0800 138 1111) and National Debtline (0808 808 4000) — see the debt solutions hub for formal options.
Understanding the Cost of Debt
Before choosing a repayment strategy, it helps to understand what your debt is actually costing you.
APR (Annual Percentage Rate) is the standard measure of borrowing cost in the UK. It combines the interest rate and mandatory fees into a single annual figure. The higher the APR, the more expensive the debt:
| Debt type | Typical APR range |
|---|---|
| Credit card (standard) | 20–40% |
| Overdraft | 19–40% |
| Personal loan | 5–20% |
| 0% balance transfer (promo) | 0% for 12–30 months |
| Payday loan | 300–1,500%+ |
Worked example: A £2,000 credit card balance at 29.9% APR, making only minimum payments of £40/month, would take over 8 years to repay and cost approximately £1,900 in interest — nearly doubling the original debt.
Repayment Strategies
Debt Avalanche
Pay the minimum on all debts, then put every spare pound toward the highest-APR debt first. Once that is cleared, roll the payment to the next highest. This minimises total interest paid.
Debt Snowball
Pay the minimum on all debts, then put every spare pound toward the smallest balance first. Once cleared, roll the payment to the next smallest. This builds momentum through quick wins and works well for motivation.
Most people benefit from the avalanche mathematically, but the snowball wins if motivation is the main obstacle.
Articles in This Cluster
| Article | What it covers |
|---|---|
| Complete UK Debt Guide | Overview of all debt types, options, and where to start |
| How to Get Out of Debt UK | Step-by-step plan for becoming debt-free |
| What Is APR? | Plain English guide to Annual Percentage Rate |
| Borrowing Options Compared | Loans vs credit cards vs overdrafts vs BNPL |
| Secured vs Unsecured Debt | Key differences, risks, and what happens if you can’t pay |
| 0% Credit Card Guide | How 0% purchase cards work, when to use them |
| Best Balance Transfer Cards UK | How to find and use a balance transfer card |
| Should I Pay Off Credit Card or Save? | Framework for deciding when to prioritise debt vs savings |
| Credit Card Repayment Calculator | Work out how long your balance will take to clear |
| Debt Payoff Calculator | Calculate your debt-free date across multiple debts |
| Debt Repayment Schedule Calculator | Build a month-by-month repayment schedule |