Which Debt Should I Pay Off First UK?
When you've got several debts — credit cards, a loan, an overdraft, some buy-now-pay-later — the obvious question is:
"Which one should I pay off first?"
There's no single right answer. What looks best mathematically isn't always what you can stick to in real life.
This guide gives you a framework for thinking about UK debt priority — not advice, but a way to organise your thoughts before testing different orders.
If you're behind on essentials or priority bills, speak to a free UK debt charity (StepChange, National Debtline) before using any calculator.
Step 1: Check the Foundations First
Before worrying about order, make sure:
1. Essentials are covered Rent/mortgage, council tax, utilities, food, transport, childcare. If you can't cover these, debt order isn't your first problem — urgent help is.
2. Minimums are possible Can you pay at least the minimum on every debt? If not, a calculator won't help — you need to negotiate or get charity advice.
3. You have a realistic debt budget What's genuinely left after essentials and a small buffer? DebtRiot estimates this, but you can adjust. Be honest — a sustainable number beats an ambitious number you'll abandon.
Once those boxes are ticked, order actually matters.
Step 2: Group Your Debts by Type
UK debts behave differently:
Typical UK debt types at a glance
Rough ranges only – your actual rate and terms will be in your own paperwork.
| Type | Typical rate | Notes |
|---|---|---|
| Credit cards | 18–30% APR | % minimum payments, revolving balance that can hang around for years. |
| Store cards | 25–35% APR | Often among the highest rates; easy to ignore as “just shopping”. |
| Overdrafts | 35–40% EAR | Limit pressure and daily stress if you’re close to or over the limit. |
| Personal loans | 5–15% APR | Fixed payments and term; usually cheaper than cards if you qualify. |
| Car finance | 7–15% APR | Often secured to the vehicle – default can risk losing the car. |
| BNPL | 0% or high | Can be 0% if cleared on time; can jump to high interest or fees if not. |
| Family loans | 0% | No interest, but lots of emotional weight – may affect your ordering. |
Within each group, ask:
Which has the highest rate?
Which is closest to a limit or promo end date?
Which would give you the most relief if it disappeared?
Step 3: A Rough Priority Framework
Everyone's situation is different, but many UK plans roughly follow this kind of priority:
Tier 1: Priority Bills (Before Unsecured Debt)
Rent/mortgage
Council tax
Energy bills
TV licence fines
HMRC debts
These have serious consequences (eviction, bailiffs, prison for council tax). They come before credit cards.
Tier 2: High-Urgency Unsecured Debt
Overdrafts at or near the limit with fees
Very high APR cards (30%+) with large balances
Promo cards about to jump to expensive standard rates
Tier 3: Standard Unsecured Debt
Credit cards at normal rates
Personal loans
Car finance
Store cards
Within this tier, use Snowball, Avalanche, Hybrid, or Cash Flow Index to find a sensible order.
Tier 4: Low/Zero Interest Debt
0% BNPL with no end date
Family loans (interest-free)
Mathematically last, but you might move family loans up for emotional peace.
Step 4: Match Strategy to Your Situation
Once you have a rough priority, pick a strategy:
Summary: which strategy fits which situation?
Use this as a starting point, then test the methods on your own numbers in the calculator.
| Strategy | Good for… |
|---|---|
| Snowball | Quick wins, lots of small debts, motivation-focused plans. |
| Avalanche | Minimising interest when one or two debts are clearly the most expensive. |
| Hybrid S → A | Quick wins first, then interest savings once a few debts are cleared. |
| Hybrid A → S | Hit the most expensive debt first, then switch to smaller balances for momentum. |
| Cash Flow Index | Very tight monthly budget where freeing up breathing room is the main goal. |
| Custom Order | Unusual situations – joint debts, family loans, overdraft limit pressure, or specific priorities. |
The "best" strategy is the one you'll actually follow for 12-24 months.
Step 5: Test It With Real Numbers
Once you have a rough idea, test it:
Go to the DebtRiot calculator
Enter income, essentials, and each debt with its true rate and minimum
Try at least:
Snowball — see how fast you get wins
Avalanche — see how much interest you save
Cash Flow Index — see how fast you free up monthly cash
Compare debt-free dates, total interest, and how the first 6-12 months feel
You might find:
The strategies produce similar results (your priority was already good)
One clearly beats the others (adjust your thinking)
Cash Flow Index changes the picture (breathing room matters)
When you're happy, turn your chosen strategy into a PDF plan with a complete schedule.
Start modelling your payoff order →
Common Scenarios
Scenario A: One debt is clearly the problem
A 35% credit card eating your budget
Everything else is 10-15%
Answer: Avalanche — kill the expensive one first
Scenario B: Lots of small annoying debts
5 debts under £1,000 each
You feel overwhelmed
Answer: Snowball — clear the clutter, build momentum
Scenario C: Cash flow is the crisis
High minimums leaving you short each month
Answer: Cash Flow Index — free up monthly budget fastest
Scenario D: Promo ending soon
£4,000 on a 0% card, 3 months left, then 29.9%
Answer: Custom order or "Prioritise ending promos" — attack it now
Scenario E: Family loan weighing on you
£2,000 to a relative, technically 0%
But it's causing relationship stress
Answer: Custom order — pay it off for peace of mind
Key Takeaways
Priority bills come before unsecured debt — rent, council tax, energy
Overdrafts near limits and ending promos often need attention first
Strategy matters, but not as much as having a plan you'll stick to
Test multiple strategies on your actual numbers before committing
If you can't cover minimums, a calculator isn't the solution — charity advice is
