Households are increasingly getting credit card debt. The mean credit card interest rates are now over 23%. This rate will make even minor budgets into huge financial burdens. You are barely covering the real debt itself when you only cover the minimal mandate monthly.
You are able to escape this loop. It is possible to settle your credit card debt using some intelligence. The following five steps have assisted so many individuals in reversing their finances.
5 Ways To Clear Your Credit Card Debt
1. Pay More Than the Minimum Each Month
The small minimum payments hardly touch your actual debt. They mostly cover the interest while your balance is the same. You’ll be stuck in debt for over 25 years if you have a £3,000 debt with a 22% APR and only pay the minimum.
You can add just £50 extra each month to slash this down to about 4 years. You can also set up a direct debit for a fixed sum rather than the minimum percentage. This maintains your payments even when your balance is going down. It would be convenient for many to round to the nearest 50 or 100 pounds to simplify budgeting and achieve quicker outcomes.
- Try the “payment challenge” – bump up your payment by £10 each month
- Use work bonuses or tax refunds to make one-off, larger payments
- Check your card statement for the “time to pay off” calculation
- Ask your card issuer to change your payment due date to match your payday
- Track your progress with a debt-free countdown app for motivation
2. Use the Avalanche or Snowball Method
The avalanche method targets your highest-interest card first. This saves you the most money in the long run. The snowball method tackles your smallest balance first. This also gives you quick wins to keep you going.
You can also get a loan with benefits from a direct lender to consolidate your debts. You can get it from direct lenders at low rates. You will be able to pay all of your loans at once and become debt-free.
You can start by listing all your cards with their balances and APRs side by side. You can pay the minimums on everything, then throw all your spare cash at your target card. Once that’s cleared, roll that payment into tackling the next card. The momentum builds as you go, with more money to attack each remaining debt.
- Create a visual debt tracker to colour in as you make progress
- Celebrate each card you fully pay off – but not with spending!
- Put paid-off cards in a drawer or freeze them in ice
- Share your plan with some friends whom you trust for accountability
- Check on your progress every month in order to be motivated
3. Move Debt to a 0% Balance Transfer Card
You might have better options. Balance transfer cards can be a lifesaver when you’re drowning in high interest. Many banks offer cards with 0% interest for up to 20+ months. This gives you a break from the interest cycle. This pause lets you chip away at the actual debt instead of just paying the bank’s profits.
Most transfers have a fee of about 2-3% of your balance, but this one-off cost beats paying 20%+ APR for years. You can divide your total debt by the number of 0% months to find your monthly target payment. You can set calendar alerts before the 0% period ends to avoid nasty surprises.
- Compare balance transfer offers on money comparison sites
- Check your credit score before applying to avoid rejection
- Read the fine print about transfer deadlines after approval
- Keep the old card open, but don’t use it (helps your credit score)
- Set up automatic payments to ensure you never miss one
4. Cut Spending and Boost Your Income
You can start with a spending audit. Many people find they’re wasting over £100 monthly on things they don’t use or need. You can cancel unused gym memberships, streaming services, and subscription boxes. You can also use comparison sites to switch energy providers and insurance. This often saves £200+ yearly with just an hour’s effort.
The food costs eat up budgets quickly. Meal planning cuts waste and impulse buys. Another important way to get cash fast on eBay, Vinted, or Facebook Marketplace is to sell any items you do not use. It is also possible to take weekend shifts or come up with a side hustle to earn additional pounds that may be essential in throwing at your debt.
- Try a “no-spend week” challenge once a month
- Switch to cash for daily spending to make money feel more “real”
- Use cashback apps and sites for things you’d buy anyway
- Claim any benefit or tax money you could be missing
- Temporarily rent out a storage space, parking, or a spare room
A loan on benefits from a direct lender can help you during tough times. Many people can get £100-£300 and pay off all the loans with careful planning. This money goes straight to your highest priority debt. This creates a snowball effect as you free up more cash each month.
5. Get Free Debt Help from UK Charities
You don’t need to face this alone. There are many amazing free services ready to help. StepChange offers expert debt advice online or by phone, without judgment. They can set up Debt Management Plans that fit your budget. Citizens Advice provides local and online support with trained advisors who know all the rules and options.
National Debtline gives free phone guidance and practical tools. Their experts deal with debt problems every day and know solutions you might miss. These services can often negotiate with creditors to freeze interest or set up affordable payment plans. They might spot options you didn’t know existed.
- These services can help you apply for breathing space schemes
- They know how to handle creditor calls and letters
- They can help check if any of your debt is actually unenforceable
- Their advice is confidential – your employer won’t know
- Using their help won’t damage your credit score further
Never pay for debt advice in the UK. The free services are generally superior to commercial ones. Many people say they wish they’d called years earlier. These services exist because debt problems can happen to anyone.
Conclusion
It is a long way to getting out of debt on credit card debt, and the end justifies the means. The more money you pay over the minimum, the closer your date of liberty is.
Most people who have paid off more than £10000 in an average year claim that the first step is the most difficult. You are doing it now instead of letting it go by another year. You are not alone, and the way to be free of debt is not as cloudy as you may believe.
