Write the debt down before choosing a strategy
A debt plan starts with facts. Creditor, balance, APR, minimum payment, missed payments, payment date and whether it is priority. Without that list, people often pay whoever shouts loudest or whoever feels most embarrassing. That is not a strategy.
Citizens Advice says priority debts should be dealt with first because the consequences can be particularly serious. After priority debts and essentials are protected, APR becomes important because high interest keeps the balance alive.
Avalanche versus snowball
Avalanche
Pay minimums on everything, then put extra money toward the highest APR. This is usually cheapest mathematically.
Snowball
Pay minimums on everything, then put extra money toward the smallest balance. This can build motivation because accounts disappear faster.
Both methods require one rule: do not miss priority bills to overpay non-priority credit.
When to get help
- You are using credit for food, rent, mortgage, council tax or energy.
- You are paying one debt with another.
- You have arrears on priority bills.
- You cannot afford minimum payments.
- You are avoiding letters, calls or banking apps.
Next steps
Sources and useful guidance
Priority debts vs non-priority debts
The single most important idea in UK debt is one that surprises people: a "priority" debt is not the one with the highest interest or the biggest balance. It is the one whose creditor has the strongest powers to harm you if you do not pay. The consequence sets the priority, not the size or the APR. A £200 council tax arrears can ultimately lead to bailiffs; a £5,000 credit card cannot send anyone to your door without first going to court. So when money will not stretch to everything, priority debts get paid first.
| Type | Examples | Why it ranks here |
|---|---|---|
| Priority debts | Rent, mortgage, council tax, gas and electricity, court fines, TV licence, child maintenance, tax owed to HMRC, and goods on hire purchase you need. | Non-payment can cost you your home, your energy supply, essential goods, or lead to enforcement agents (bailiffs), wage deductions or court action. |
| Non-priority debts | Credit cards, store cards, overdrafts, personal loans, catalogue debt, buy-now-pay-later, money owed to friends and family. | Serious — they damage your credit file and accrue interest — but the lender must go to court before it can force repayment, and cannot take your home or cut your power directly. |
This is why the order of attack is always: keep priority bills current, then cover the minimum payment on every non-priority debt to avoid default, and only then put any spare money towards clearing debt faster. Never skip rent or council tax to overpay a credit card — that swaps a survivable problem for a dangerous one. Citizens Advice keeps an up-to-date list of which debts count as priority if you are unsure where something sits.
How minimum payments trap you
Credit card minimum payments are designed to be affordable, which is exactly what makes them dangerous. A typical minimum is a small percentage of the balance (often around 1% plus that month's interest, or a few pounds, whichever is higher). Because the percentage shrinks as the balance falls, paying only the minimum stretches repayment over an extraordinarily long time and the interest can rival the original debt.
Take a realistic example: a £3,000 balance at 24.9% APR. Paying only the minimum each month, you would be repaying for well over a decade and the total interest can end up in the region of the original balance — you effectively buy the goods twice. Now fix your payment at a flat £150 a month instead of letting it fall: the balance clears in roughly two years with a fraction of the interest. The lesson is not "minimums are evil" — it is that the minimum is a floor to avoid default, never a repayment plan. Pick a fixed monthly amount you can sustain and keep paying it even as the balance drops. UK card statements now show how long minimum-only payments would take, which is worth reading the next time one lands.
Snowball vs avalanche: a worked example
Both methods (introduced above) assume you keep paying every minimum and have, say, £100 a month spare to throw at one debt. Suppose you have three non-priority debts:
- Store card: £600 at 29% APR
- Credit card: £2,400 at 23% APR
- Personal loan: £1,000 at 9% APR
The avalanche method targets the highest rate first, so you attack the 29% store card, then the 23% card, then the 9% loan. This costs the least in interest overall, because you are always killing the most expensive debt. The snowball method targets the smallest balance first — here that is also the £600 store card, then the £1,000 loan, then the £2,400 card — which clears whole accounts quickly and gives a motivating sense of progress, but pays a little more interest because the 9% loan is cleared before the 23% card.
In this example the two methods happen to start the same way, which is common: the smallest debt is often also a high-rate store card. When they diverge, choose with your head and your temperament. Avalanche is mathematically cheaper; snowball is psychologically stickier, and a plan you actually stick to beats a cheaper one you abandon. Whichever you pick, the iron rule holds: minimums on everything else, priority bills first, never miss them to overpay.
Where to get free debt help in the UK
If essential bills and minimum payments no longer fit your income, that is a signal to get advice early — not a personal failing. Free, confidential, non-judgemental debt advice is available across the UK, and these organisations can do things you cannot do alone, such as negotiate with creditors, set up a debt management plan, or check whether a formal solution fits. You never have to pay for debt advice.
- StepChange Debt Charity — free debt advice and managed debt plans, online or by phone.
- National Debtline — free phone and online advice, with clear self-help fact sheets and template letters.
- Citizens Advice — free advice in person, by phone and online, including help with priority debts, benefits and creditors.
- MoneyHelper (government-backed) — free guidance plus a debt advice locator to find a regulated adviser near you.
One option these advisers can explain is the government's Breathing Space scheme (the Debt Respite Scheme) in England and Wales, which can pause most interest, fees and enforcement action for a set period while you get advice and put a plan in place. Different rules apply in Scotland and Northern Ireland, which a free adviser can talk you through.
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