Expensive debt has a way of feeling permanent. A credit card balance that never quite goes down, an overdraft that has become the new zero, a “buy now pay later” plan that seemed harmless in the shop. None of it is permanent. But getting out requires doing things in an order, and the order matters more than most people realise.

This guide is not about shame. Almost everyone carries some debt at some point, and a lot of it was taken on for reasonable reasons at the time. It is about the mechanics of getting rid of the expensive kind.

First, know what “expensive” means

Not all debt is the same. A mortgage at a few percent, or a student loan with income-linked repayments, is cheap borrowing that usually does not need to be rushed. The debt to worry about is anything with a high interest rate, and you would be surprised how high:

  • Credit cards commonly charge 20 to 30% APR, sometimes more. Every €100 you owe costs €20 to €30 a year just to keep owing.
  • Overdrafts are often priced like credit cards now, and some are worse.
  • Buy now, pay later is free if you pay on time. Miss a payment and the fees and interest can be brutal, and it is easy to have several running at once without noticing the total.
  • Payday and short-term loans are the most expensive borrowing legally available, and the first thing to clear if you have any.

Write every debt down: who it is with, the balance, the interest rate, and the minimum payment. This list is the whole plan. Most people have never made it, and the total is usually both worse and more manageable than they feared.

The two methods, and which to use

Once you have the list, there are two well-known ways to attack it.

The avalanche. Pay minimums on everything, and throw every spare pound or euro at the debt with the highest interest rate. When it is gone, move to the next highest. This is the mathematically optimal method: it costs you the least in total interest.

The snowball. Pay minimums on everything, and throw everything spare at the smallest balance. When it is gone, roll that payment into the next smallest. This costs a little more in interest, but you get the first “paid off” moment sooner, and that moment is what keeps people going.

Which one is right? The one you will actually stick with. If you are motivated by numbers, avalanche. If you have tried before and lost momentum, snowball. The difference in total cost between them is usually small; the difference between finishing and not finishing is everything.

Stop the bleeding while you pay it down

Paying off debt while adding to it is running up a down escalator. Three things help:

Put the cards away. Not cut up, necessarily, but out of the wallet and out of the phone’s payment app. If the only way to spend on them is to physically go and get them, most impulse spending stops.

Fix the budget first. Debt repayment only works if the monthly numbers leave something spare to repay with. If they do not, the budget needs sorting before the debt does, or the debt will simply come back.

Hold a small emergency fund. It seems backwards to save while owing money at 25%, but a few hundred set aside means the next unexpected bill does not go straight back on the card. Build a small cushion, then attack the debt, then build the full emergency fund.

The 0% balance transfer, honestly

Moving a credit card balance to a new card at 0% for a fixed period is a genuinely useful tool, and one that catches people out.

What it does: stops the interest, so every payment reduces the balance rather than feeding the card company.

What it costs: usually a transfer fee, a percentage of the balance, charged up front. Two or three percent of a large balance is real money; it is still usually far less than the interest it replaces.

Where it goes wrong: the 0% period ends, the rate jumps to the standard rate, and the balance is still there. Or a new purchase on the card is charged at full interest while the transferred balance sits at zero. Or, most commonly, the old card is now empty and gets used again, so there are two balances.

Used properly, a transfer buys you a window in which every payment counts. Divide the balance by the number of months at 0%, set up a standing order for that amount, and the debt is gone before the rate returns. Used as a way to feel better without changing anything, it makes things worse.

When to get help

There is a line, and it is worth naming. If minimum payments are eating most of your spare money, if you are borrowing to make payments on other borrowing, if you are avoiding opening post, the do-it-yourself methods above are not enough, and that is not a personal failing.

In the UK, free, confidential debt advice is available from charities such as StepChange and Citizens Advice, and from National Debtline. They can negotiate with creditors, set up formal arrangements, and in serious cases explain the legal options. They are free; anyone charging you for debt advice should be treated with suspicion. In Cyprus and elsewhere in the EU, consumer protection bodies and non-profit debt counselling services exist and are worth finding before things get worse rather than after.

Getting help early is cheaper, in every sense, than getting it late.

Where this fits

Credit and debt is Module 4 of our Financial Literacy Course: how credit scores actually work, what the different products cost, and the honest way out. It sits between budgeting and savings in the course for a reason: you need the first to find the money, and you are building towards the second.

To see how your debt position compares with the rest of your finances, the free Financial Health Check on our Finance page takes two minutes.

Educational guidance, not regulated financial advice. Interest rates, fees and the availability of debt advice differ between countries and change over time. If you are struggling with debt, please seek help from a free, regulated debt advice service.