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credit card debt tips for managing your finances

5 Tips for Dealing with Credit Card Debt

Updated for 2026

Credit card debt is one of the most common financial problems in the UK. With average interest rates now sitting above 24% and household budgets squeezed by rising bills, it is easier than ever to fall behind on repayments. If your balance keeps growing and you are only managing the minimum payment each month, something needs to change.

1. Reject Any Increase to Your Credit Card APR

Credit card providers can raise your interest rate, but you do not have to accept it. Under the Consumer Credit Act 1974, if your card company notifies you of an APR increase, you have 60 days to reject the change. Once you do, you will no longer be able to use the card for new spending, but you can continue to repay the outstanding balance at the original, lower rate.

This is a genuinely useful option if you are carrying a large balance. The difference between, say, 22% and 28% APR on a \u00a33,000 balance could add hundreds of pounds in extra interest over a year. Always read any letters or emails from your card company carefully, and act quickly if you spot a rate change.

2. Switch to a 0% Balance Transfer Card to Reduce Credit Card Debt

One of the most effective ways to tackle what you owe is to move your balance to a 0% balance transfer card. As of early 2026, some of the best deals on the market offer up to 29 months at 0% interest, giving you a window to pay down the balance without interest adding to it.

You will typically pay a transfer fee of 1% to 3% of the balance, but this is usually far less than the interest you would otherwise be charged. Compare deals carefully using MoneyHelper's balance transfer guide to find the right card for your situation.

A few things to watch for:

  • Make sure you pay at least the minimum each month, or the 0% deal may be cancelled
  • Avoid making new purchases on the balance transfer card, as these are often charged at the standard rate
  • Set a reminder for when the 0% period ends so you can reassess

3. Pay More Than the Minimum Each Month

If you only pay the minimum on your credit card, it could take decades to clear the balance. Card companies set minimum payments low, often around 1% to 2.5% of the balance plus interest. On a \u00a35,000 balance at 24% APR, paying only the minimum could mean you end up repaying more than double the original amount over time.

Even an extra \u00a320 or \u00a330 a month above the minimum can make a significant difference. It reduces the total interest charged and shortens the repayment period considerably. If you have multiple cards, focus extra payments on the one with the highest interest rate first.

Paying more than the minimum also helps your credit score. Lenders see consistent above-minimum payments as a sign that you are managing your finances responsibly.

4. Prioritise Paying Off Your Balance Before Saving

It might feel counterintuitive, but if you have credit card debt, paying it off should come before building savings. The reason is simple maths. The interest rate on most cards, currently averaging around 24% in the UK, is far higher than anything you would earn from a savings account.

For example, if your savings account pays 4.5% interest but your card charges 24%, every pound sitting in savings is effectively costing you 19.5% per year.

The one exception is your emergency fund. StepChange recommends keeping a small buffer of around \u00a31,000 for unexpected costs, so you do not have to rely on credit again when something goes wrong. Once the balance is cleared, you can redirect those payments into proper savings.

5. Get Free Debt Advice if You Are Struggling

Trying to manage credit card debt alone can feel overwhelming, especially if you are also juggling council tax arrears or other household bills. The good news is that free, impartial debt advice is widely available in the UK.

These organisations offer confidential help at no cost:

  • StepChange: free online and phone debt advice, including debt management plans
  • MoneyHelper: government-backed money and debt guidance
  • Citizens Advice: face-to-face and online support for all debt types
  • GOV.UK: official guidance on debt repayment options

A qualified adviser can help you work out a realistic budget, negotiate with creditors, and explore formal options like a Debt Management Plan (DMP) or an Individual Voluntary Arrangement (IVA) if your debts are more serious.

When Card Balances Affect Your Council Tax

Credit card debt rarely exists in isolation. When monthly repayments eat into your income, essential bills like council tax can fall behind. Unlike credit cards, council tax is a priority debt. Your local authority can take enforcement action far more quickly than a card company, including sending bailiffs or applying for deductions from your wages.

If you are struggling to keep up with both card payments and council tax, it is important to prioritise council tax first. Missing council tax payments can escalate within weeks, whereas card companies generally have longer processes before taking court action.

Council Tax Advisors offers free advice to anyone dealing with council tax debt, bailiff problems, or wider financial difficulties. Getting the right guidance early can prevent a manageable situation from becoming a crisis.

Take the First Step Today

Carrying a balance on your cards does not have to control your life. Whether you switch to a better deal, increase your monthly payments, or reach out for professional advice, every step forward counts. The worst thing you can do is ignore the problem and hope it goes away.

If you need help with council tax debt, bailiff issues, or any financial difficulties, contact Council Tax Advisors today. Our team provides free, confidential guidance to help you get back on track.

Need Help With Debt?

Council Tax Advisors provides free, confidential advice on council tax debt, bailiff problems, and wider financial difficulties. Get in touch today.

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