UK Debt Payoff Calculator

Mathematically, avalanche (highest APR first) always pays less total interest because it kills your most expensive debt fastest. Psychologically, snowball (smallest balance first) gives you quick wins as small debts disappear, which keeps motivation up. For most people the £ difference is small (a few hundred pounds over a few years); the right strategy is the one you'll actually stick with. For under £10,000 of debt, snowball's psychological boost often wins; for larger amounts, avalanche's interest saving becomes more meaningful.

Since 2011, UK credit card minimum payments must be at least the monthly interest plus 1% of the outstanding balance, or £5, whichever is higher. This stops the historical scenario where the minimum was lower than the monthly interest and the balance grew over time. Your card's minimum may be higher than this floor - check your statement. Paying only the minimum still means it takes decades to clear a meaningful balance.

A 0% balance transfer card lets you move existing credit-card debt to a new card that charges 0% interest for a promotional period (typically 12-30 months). You pay a one-off transfer fee (usually 2-4% of the transferred amount). During the 0% period every payment goes directly to the balance instead of interest, so you clear the debt much faster. The catch: at the end of the 0% period the rate jumps to the standard APR (24-30%), so aim to clear the whole balance before the promo ends. Always check eligibility with a soft search before applying.

In most cases yes - but keep a small emergency fund first. UK credit-card APRs are typically 24-35%, while top savings rates are around 5%. Paying off a 25% APR card with savings earning 5% is mathematically equivalent to a guaranteed 20% return. The exception: keep at least 1 month of essential expenses in cash before paying down debt, so a surprise bill doesn't force you back onto the card. After clearing high-APR debt, rebuild the emergency fund to 3-6 months.

StepChange and National Debtline are UK charities offering free, impartial, FCA-authorised debt advice - they never charge. They can set up Debt Management Plans, advise on Debt Relief Orders or IVAs, or negotiate with creditors on your behalf, all at no cost. Paid debt-management companies offer similar services but charge fees (sometimes hidden in the monthly payment) - meaning more of your money goes to them rather than your creditors. You should never need to pay for debt advice. If you're being asked to, walk away.

No - paying down debt improves your credit score by reducing your credit utilisation (the percentage of available credit you're using). The only minor blip can come from closing accounts after they're paid off, because that reduces your total available credit and shortens your credit history. If you can leave a paid-off card open with a £0 balance, that's usually fine. Missed payments and high utilisation hurt your score; clearing debt helps it. A Debt Management Plan or DRO will be recorded and affect your score for 6 years, but the immediate damage of missed payments is usually worse.