Clearing credit card debt
Credit cards are easy to spend on and slow to clear. This guide explains why minimum payments are a trap, how to pay off faster, and when a balance transfer or consolidation helps.
Why minimum payments cost so much
UK minimum payments are typically the greater of around 1% of the balance plus that month's interest, or a few pounds. Because the percentage shrinks as the balance falls, the payment gets smaller over time and most of it goes on interest. Paying only the minimum on a typical card can take decades and cost more in interest than the original balance. Card statements now show how long minimum-only repayment would take — it's usually a shock.
Pay a fixed amount, not the minimum
The single most powerful move is to pay a fixed monthly amount rather than the shrinking minimum. Keeping the payment level means an ever-larger share clears the balance, and the debt falls away far faster. Even a modest increase over the minimum can cut years off the term — use the calculator to see your own numbers.
Balance transfers and 0% deals
A 0% balance transfer card moves your debt to a card charging no interest for a promotional period (often 12–30 months), usually for a one-off transfer fee of 1–3%. Every pound you pay then clears the balance instead of feeding interest. To benefit, clear (or move) the balance before the 0% period ends and avoid new spending on the card. It's one of the cheapest ways to attack expensive card debt.
Clear it before the 0% ends
Snowball vs avalanche
With several debts, two strategies work. The avalanche targets the highest-APR debt first (mathematically cheapest). The snowball clears the smallest balance first for quick wins and motivation. Both clear all debts; avalanche saves the most interest. The debt payoff planner compares them for your debts.
Common mistakes
- Paying only the minimum. It stretches the debt over decades and maximises interest. Pay a fixed amount instead.
- Spending on a 0% card. New purchases can lose the 0% benefit and complicate repayment. Use it only to clear the transferred balance.
- Missing a payment on a 0% deal. A missed payment can cancel the promotional rate. Set up a direct debit.
- Ignoring higher-APR debts. Tackle the most expensive debt first (avalanche) to save the most.