How to Pay Off Credit Card Debt: Your UK Guide
Credit card debt can feel like a heavy burden, weighing on your mind and your budget. With interest rates potentially high, it can seem like an uphill battle just to make a dent in the balance. But you're not alone in this – millions across the UK manage credit card debt, and there are proven strategies and support available to help you take back control.
At Plouta, we believe financial wellness is about feeling empowered, not overwhelmed. So, let's explore practical tips and solutions to help you pay off your credit card debt and move towards a brighter financial future.
The UK Credit Card Debt Landscape
Credit card debt is a significant part of household finances in the UK. According to the Bank of England, total outstanding credit card debt in September 2024 was around £71.7 billion, a 9.5% increase from the previous year. The average credit card debt for UK households in 2024 was approximately £2,486. (Source: MoneySuperMarket, Bank of England). These figures highlight that many people are navigating similar challenges.
Credit card interest rates can also be high, with the average APR on a credit card being around 35.6% (Source: Which.co.uk). This high interest is why paying off debt quickly is crucial.
Top Tips for Paying Off Your Credit Card Debt
Let's dive into actionable strategies to help you get out of the red:
Stop Adding to the Debt: This is step one, and it's essential. Put your credit card away – literally. Freeze it in a block of ice, put it in a drawer, or even self-exclude yourself from using it if your provider offers that option. Focus entirely on repaying what you already owe.
Understand Exactly What You Owe: Gather all your credit card statements. Note down:
The total balance on each card.
The interest rate (APR) for each card.
The minimum payment required for each. Knowing these numbers gives you a clear picture of your starting point.
Prioritise Your Debts (Snowball vs. Avalanche): There are two popular methods for tackling multiple credit card debts:
Debt Avalanche (Recommended): Focus on paying off the credit card with the highest interest rate first, while making minimum payments on all other cards. Once the highest-rate debt is clear, take the money you were paying on that and add it to the next highest interest rate debt. This method saves you the most money in interest over time.
Debt Snowball: Focus on paying off the credit card with the smallest balance first, while making minimum payments on others. Once that's clear, take the money you were paying on that and add it to the next smallest debt. This method offers psychological wins that can keep you motivated, even if it costs slightly more in interest.
Pay More Than the Minimum: Minimum payments are designed to keep you in debt for a long time, often paying vast amounts in interest. Even an extra £10 or £20 a month can make a significant difference to how quickly you clear your debt and how much interest you pay. Use an online credit card repayment calculator to see the impact of increasing your monthly payments.
Create and Stick to a Budget: A budget is your roadmap to financial control. List all your income and outgoings. Identify areas where you can cut back (e.g., subscriptions you don't use, fewer takeaways, cheaper groceries) and redirect that freed-up money towards your credit card debt. Tools like Plouta can help you track your spending and identify savings.
Consider a 0% Balance Transfer Credit Card: If you have good credit, a 0% balance transfer card could be a game-changer.
How it works: You transfer your existing credit card debt from one or more cards to a new card that offers a 0% interest period (which can be up to 33 months - Source: MoneySuperMarket). This means all your payments go directly towards the principal balance, not interest, for that promotional period.
Things to watch out for:
Balance Transfer Fee: Most cards charge a one-off fee (typically 1-3.5% of the transferred amount). Factor this into your calculations.
0% Period: Ensure the interest-free period is long enough for you to realistically pay off the debt.
New Spending: Do NOT use the new card for purchases during the 0% period, as these often incur interest immediately.
Missed Payments: Missing a payment can often revoke your 0% offer.
Credit Score Impact: Applying for a new credit card will leave a mark on your credit file. Don't apply for too many in a short space of time.
Explore Debt Consolidation Loans: If you have multiple debts (credit cards, personal loans, overdrafts), a debt consolidation loan could simplify your repayments.
How it works: You take out one new loan to pay off all your existing debts. You then only have one monthly payment to manage, ideally at a lower overall interest rate.
Things to watch out for:
Interest Rate: Make sure the new loan's interest rate is lower than the average interest rate of your current debts.
Loan Term: Extending the repayment term might lower your monthly payments but could mean you pay more interest overall.
Eligibility: Your eligibility will depend on your credit score and financial situation.
When to Seek Professional Help
If your credit card debt feels overwhelming, or you're struggling to make payments, it's vital to seek professional, impartial advice. You are not alone, and free, confidential support is available in the UK.
Organisations that can provide free debt advice include:
StepChange Debt Charity: Offers free, confidential debt advice and practical solutions like Debt Management Plans (DMPs).
National Debtline: Provides free debt advice over the phone and online.
Citizens Advice: Offers free advice on a wide range of issues, including debt.
MoneyHelper (part of the Money and Pensions Service): A free government-backed service offering clear financial guidance and help finding debt advisers.
These organisations can help you:
Understand your full financial situation.
Negotiate with creditors.
Explore formal debt solutions like Debt Management Plans (DMPs), Individual Voluntary Arrangements (IVAs), or Debt Relief Orders (DROs) if appropriate.
Case Study Example: Sarah's Story
Sarah, 32, had £5,000 spread across two credit cards, both at a typical APR of 24.9%. She was only making minimum payments, and it felt like she was getting nowhere.
Assessed Debt: Card A: £3,000 (24.9% APR), Card B: £2,000 (24.9% APR).
Budgeting: Sarah cut down on takeaways and unused subscriptions, freeing up an extra £75 per month.
Balance Transfer: With a good credit score, she qualified for a 0% balance transfer card for 28 months with a 2% fee. She transferred both balances, paying a £100 fee.
New Payment Plan: With £75 extra per month, plus her previous minimum payments (around £120 total), she committed to paying £195 per month towards the new 0% card.
Result: Over the 28 months, Sarah paid £5,460 (£195 x 28), which cleared her £5,000 debt plus the £100 fee, saving her hundreds in interest she would have paid on her old cards. She became debt-free just before the 0% period ended.
Take Control of Your Financial Future
Paying off credit card debt takes discipline and a plan, but it is absolutely achievable. By understanding your debt, prioritising repayments, and utilising the tools available in the UK, you can move towards a debt-free future.
Feeling ready to tackle your credit card debt head-on? For personalised guidance and support to create a plan that works for you, we invite you to book a call with one of our trusted financial advisers. They're here to help you regain control and build a healthier financial life.
Sources:
MoneySuperMarket: UK Credit Card Statistics - May 2025
Which.co.uk: Best low-interest credit cards 2025
GOV.UK: Options for dealing with your debts: Debt Management Plans
MoneySavingExpert: Balance transfer credit cards guide
Important Disclaimer: The information provided in this article is for general informational and educational purposes only, and does not constitute financial advice. Everyone's financial situation is unique, and what may be appropriate for one person may not be for another. We strongly recommend that you seek personalised advice from a qualified and FCA (Financial Conduct Authority) approved financial adviser before making any financial decisions or taking any action based on the content of this article.
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