How to get out of debt faster: the two methods that work

There is something particularly demoralising about debts that never seem to shrink. You pay every month, you are disciplined — and yet the balance barely moves. It is not an illusion: it is mathematics. Interest is working against you, and minimum payments were designed precisely to keep it that way.

The good news: there are two proven methods for getting out of debt faster — and both work. What differs is the profile of the person using them.

First: understand why minimum payments are a trap

A credit card with £3,000 of debt at 20% annual interest, paying only the minimum each month, can take over 25 years to clear — and you pay almost double the original balance in interest alone.

Lenders do not communicate this clearly. Minimum payments are calculated to keep you paying interest for as long as possible. Knowing this is the first step to changing it.

Method 1 — Debt Snowball

How it works: order your debts from smallest balance to largest, regardless of interest rate. Pay the minimums on all of them — and direct every spare pound towards the smallest debt. Once that is gone, everything you were paying on it moves to the next one.

Advantage: early wins arrive quickly. Paying off the first debt creates real psychological momentum — the feeling of genuine progress keeps you going. Behavioural finance research consistently shows this method has the best long-term completion rates.

Disadvantage: it may cost more in total interest, because it ignores rates.

Method 2 — Debt Avalanche

How it works: order your debts by highest interest rate, regardless of balance. Pay the minimums on all of them — and direct every spare pound towards the highest-rate debt. Once that is gone, the freed-up payment moves to the next highest rate.

Advantage: mathematically the most efficient method — you pay less total interest and clear your debts faster in real cost terms.

Disadvantage: the first debt to eliminate may be your largest, which takes longer — and the lack of quick wins can be demotivating.

Which one should you choose?

The honest truth: the best method is the one you will actually follow. An imperfect plan executed consistently beats any perfect plan abandoned after two months.

What not to do while paying off debt

• Do not take on new debt — cut up credit cards if necessary. It is not dramatic, it is strategic.
• Do not invest while carrying high-interest debt — if you have debt at 20%, any investment would need to return more than that to break even. It rarely does.
• Do not miss minimum payments on other debts — late payments generate penalties and damage your credit score.
• Do not forget a small emergency buffer — even while paying off debt, keep €500–1,000 accessible so a surprise does not force you into new debt.