UK Debt: The Numbers
UK households owe over £1.8 trillion in total (including mortgages). Strip out mortgages and the average person is carrying about £3,800 in unsecured debt. The strategies below are not theoretical; they are the tools that actually shift that number.
Strategy 1: Balance Transfer (Best First Move)
If credit card debt is the problem, a 0% balance transfer card is usually the first move to make. You shift your existing balance onto a new card that charges 0% interest for a fixed period. The only upfront cost is the transfer fee.
Current market (2026): - Up to 29 months at 0% from the best providers - Transfer fee: typically 1-3% of the balance - Minimum payments required monthly
How to calculate if it's worth it: - Transfer fee on £3,000 at 2.9% = £87 - Interest saved on £3,000 at 22% APR over 20 months = ~£1,100 - Net saving: ~£1,013
That is not a marginal gain. The trap is simple: if you miss a payment or let the 0% period expire with a balance still sitting there, you will be charged the card's standard APR immediately. Set a direct debit for the minimum on day one, and put the promotional end date in your calendar.
Strategy 2: Avalanche Method (Mathematically Optimal)
Pay the minimum on every debt. Every spare pound goes toward whichever debt carries the highest interest rate.
Why it works: You kill the most expensive debt first, so less of your money disappears as interest.
Example: | Debt | Balance | APR | |------|---------|-----| | Credit Card A | £2,000 | 22.9% | | Credit Card B | £1,500 | 18.9% | | Personal Loan | £5,000 | 6.9% |
Pay the minimum on all three. Every extra pound goes to Credit Card A (22.9%) until it is cleared, then to Credit Card B, then the loan.
Mathematically, avalanche wins. The catch is that it can feel slow if your highest-rate debt is also one of the larger balances. You might be chipping away at Credit Card A for months before anything actually disappears from your list.
Strategy 3: Snowball Method (Psychologically Powerful)
Pay the minimum on every debt. Every spare pound goes toward the smallest balance, regardless of rate.
Why it works: Quick wins. Clearing a debt entirely, crossing it off, is genuinely motivating, and motivation matters when you are doing this for months or years.
Using the same example, you would target Credit Card B (£1,500) first because it is the smallest balance, not because it has the worst rate.
The snowball costs you more in total interest than the avalanche. That is a real downside. But if the alternative is losing momentum and stopping altogether, a little extra interest is worth paying for the psychological momentum.
Strategy 4: Hybrid Approach (Our Recommendation)
- . Start with snowball to clear 1-2 small debts quickly (builds momentum)
- . Switch to avalanche for the remaining debts (saves the most money)
- . Use balance transfers for any credit card debt over £1,000
This is the approach that most people should actually use. You get an early win to prove to yourself it is working, then you switch to the maths-optimal method once the habit is established.
Strategy 5: Debt Consolidation Loan
You take out a single personal loan at a lower interest rate and use it to clear multiple higher-rate debts. One payment, one rate, one end date.
When it makes sense: - Your loan rate is significantly lower than your card rates - You have the discipline to not re-borrow on the cleared cards - The total cost (including the loan term) is less than continuing with current debts
The second point is the one that catches people. Consolidating credit card debt onto a loan and then running the cards back up again leaves you worse off than when you started.
Strategy 6: Negotiate with Creditors
If you are struggling to keep up: - Call your provider and explain your situation - Ask about hardship programs (reduced payments, frozen interest) - Consider free debt advice: StepChange (0800 138 1111) or Citizens Advice
Creditors would generally rather agree a reduced payment plan than deal with a formal default. You do not need a debt management company to make this call for you, and you certainly should not pay someone to do it.
What NOT to Do
- Don't ignore it: debt grows through compound interest and the problem does not shrink on its own
- Don't take payday loans: APRs can exceed 1,000%
- Don't pay for debt advice: free services (StepChange, National Debtline) are excellent and do the same job
- Don't close old credit cards immediately: they help your credit score
Track Your Payoff
CoreFi's debt payoff calculator shows you exactly when you will be debt-free under each strategy, how much total interest you will pay, and your monthly targets. A concrete debt-free date changes how you think about every pound you have spare.