What is the best way to start clearing debt?

[Herecomestheson0106]

I have a couple of credit cards and shop cards I have accumulated over the years. I've paid them back and used them again and gone round in circles. My income has recently increased and any borrowing I have is affordable but it's still a huge chunk going out on interest alone and I've decided 2025 is the year I try to clear it all (or at least make a significant dent).

what is the best way? start with the smaller bits of borrowing and work my way up?

set an amount to pay back for each and pay a bit of everything at the same time?

start on the bigger ones?

Dave Ramsey snowball method.

Min payment for all, pay smallest first. Once that’s cleared, carry that payment to next smallest and so on.

Start by cutting up the cards and don’t put anything else on them.

I would start on the one with the highest interest. Pay the minimum on everything else then set an amount that you can easily afford to pay off the highest interest one. Once that is paid off start paying the amount you were paying on that to the second highest interest one etc etc

i never considered when one was paid off to add what I would usually pay onto the next one. Brilliant!

I’d take a lower interest rate loan, pay them all off and pay the loan back monthly.

I have contemplated this, however I'd have to be approved for the loan alongside my current credit. I don't have bad credit, never missed a payment or made a late payment it's just the amount of credit I have would be hard to match in a loan just now. If I start paying some off then a loan would definitely be an option once I've made a dent.

Pay as much as possible off the higher interest debts first. Drastically cut back your spending to bare minimum to increase your debt repayments. Put time aside to sort your stuff and sell everything you don’t need or use anymore.

Transfer as much as you can to a 0% bal transfer card, preferably with no fee but even a 3% fee would be better than 23% interest on debt.

Pay the remainder of the interest bearing debt ASAP then move onto the 0% debt and pay it all off before the 0% ends, divide the the debt £ by the months left and pay that set amount every month.

Pay off the ones with the highest interest rates first, pay the minimum on everything else. Once you've cleared the highest rate move to the next highest.

If you can move some of your debt to zero interest credit cards do that first, but make sure you can pay them off at the end of the zero rate period if the rates are then higher than your other debts.

I consolidated them all onto a 0% transfer and then moved the balance around so I didn’t have to pay interest. I had to cut up my credit cards and not use them while I was paying off the debt. I then drew up a strict budget which put me in a better place with money. Good luck.

How much are you looking at in total debt?

Debt can get to be a habit. I used to have the habit and I know I could go back there pretty easily. Cut up the cards first of all, cancel your overdraft arrangement, overhaul your spending.

Then get going on the most expensive debt first. I agree Dave Ramsey can get your mindset changing, though I wouldn't go with all of his stuff it's helpful.

As much as possible on 0% Clear Score let's you know which cards you'd likely be approved for.

I’m a huge fan of snowball, even if highest interest makes more sense. Snowball was more “rewarding”.

its about 20K between myself and DP. Half of that is 0% though. I don't have an overdraft thankfully it's split across a couple of credit cards and and shop store cards. DP lost his job earlier on in the year just after we paid a chunk off the mortgage and we resorted to utilising the credit we had as I was on mat leave and in the middle of a house Reno. My income has now increased and DP has started a job with a salary increase so we don't have the need to borrow any more.

our repayments are affordable but we don't want to get comfortable just paying minimum payments and not actually clearing anything. The snowball method looks easy enough to follow. It can definitely be hard to get out of the mindset. I actually work in finance and see how out of control this sort of thing can be, it's only now I realise how easy it is to be sucked in!

I always have credit card debt but never pay interest. You should be managing your debt so you're moving it to 0% cards. Thats your issue here. Yes I need to pay a one-off fee when moving, usually around 3% depending on the deal but if that gives me 2.5 years interest free then great.

Agree with pps
Transfer as much as possible to 0% and close the ones you're not using anymore
Stop spending on credit cards.
Pay highest interest first or the shortest 0%

Ramseys first step is a savjngs buffer - think he recommends 1k - so you don't have to dip back onto credit cards and honestly it's completely life changing to have a small buffer. We don't have loads but do have 2k in an easy access account and the peace of mind it gives is phenomenal. It wouldn't cover redundancy but I know that if car/boiler/washing machine goes bang i can sort it out without going into debt. So so relieving

Just seen you've also had salary increases.

Is it possible to 'stay' on your current salary and just put the rises straight into the debt?

Just remember to make note in your diary of when the 0% runs out so you've got time to find another.

There's a great app I saw recommended here on MN called DebtPayoffPlanner, it offers a visual way to see all of your debts in one place and see the progress you are making to paying them off.

It also gives you options to choose strategies to pay down your debt, including the debt snowball method mentioned above, and the debt avalanche which is paying off the highest debt first. You can see how long it would take you using each method. You can also add in extra payments so that you can see the benefit for example of skipping the £50 takeaway and paying it off your store card instead.

Money saving expert is good for listing current offers on 0% credit cards, and often you can see if you’d be eligible for one in theory before you actually apply.

Yeah £20k is a fuckload of money. It sounds very doable in your current circumstances - good call to overpay the mortgage even if the timing was shit, but i would focus now on clearing the debt. Imagine what it will be like when you have £20k savings instead.

Agreed that a slush fund/buffer is a lifesaver. My late dh was amazing with money and somehow kept us a buffer of £400 even at our most skint times when we were living on value pasta and chopped tomatoes. Saved our bacon many times over.

What everyone else has said, but also make sure you've reviewed your budget to get everything at the best price and eliminated/reduced unnecessary spending like subscriptions for services you don't use and most food and drink out of the house.

Moneysaving Expert goes through everything you need to do to get out of debt, stay out of debt, and put yourself in a better place in the future so your money goes further and you're more financially stable (for most people apart from the poorest and most wealthy, how people manage their money is far more relevant than how much money they actually have - small changes in what you spend can make a huge difference over time).

https://www.moneysavingexpert.com/family/money-help/

https://www.moneysavingexpert.com/banking/budget-planning/

use the budget planner to plan finances, and be honest.

There is so much helpful advice here thank you so much.

unfortunately I'm not eligible for any 0% cards at the moment but I will keep checking on clear score. I have always had a buffer and kept any credit card useage low but this year has thrown a lot of financial curve balls. Thankfully we are starting the new year with a much better income which will help us clear things up. It can be very overwhelming not knowing where to start but I feel like I have an idea now.

As others have said
Work out which card costs you the most interest rate wise
Hit that one first with everything you can and minimum payments for the others
Once that has gone then include that payment and hit the next one on the list
Make a note of when the interest free period finishes so you know when those need to be included in your list.

That is the best way of doing it. Be realistic with your budget though. Allocate some money for fun and things like annual insurance otherwise they will just end up on credit cards too.

This...but I would do this and exclude anything on 0%.

So keep paying minimum on anything on 0%, then snowball the rest of them, lowest to highest. Once the snowball debts are cleared, start on the 0%.