Category: Debt

The short version: A 0% balance transfer card lets you move existing credit card debt to a new card that charges no interest for a fixed period — typically 24–30 months in 2026. You pay a one-off transfer fee of around 2–4% of the amount you move. If you clear the whole balance before the 0% period ends, you pay zero interest on the original debt. If you don’t, the rate reverts to around 21–26% APR, so the savings unwind fast.

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You’ve got credit card debt. It’s not going anywhere — or more accurately, it is going somewhere: straight into interest charges every single month. You pay £50. £40 goes to interest. £10 comes off the actual balance. Repeat forever.

A 0% balance transfer card is designed to break that cycle. Used correctly, it’s one of the few genuinely useful credit card products — not a trap, not a gimmick.

But used incorrectly, it just kicks the problem down the road with a fee attached.

I spent ten years working in financial services — including at Barclaycard, one of the UK’s biggest balance transfer providers — so I know how these products work from the inside. Here’s exactly what to do.

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What is a 0% balance transfer card, exactly?

It’s a credit card that offers a promotional 0% interest rate on balances you transfer from other cards. Instead of paying interest on your existing debt while you clear it, you pay nothing — for the length of the promotional period.

The card issuer makes their money from the transfer fee, and from anyone who doesn’t clear the balance before the 0% period ends. That’s it. That’s the business model. Which means if you clear the balance on time, you genuinely win.

How much does a balance transfer fee cost?

Most cards charge a one-off fee of 2–4% of the balance you transfer, deducted when the transfer completes. On a £2,000 balance, that’s £40–£80. On a £5,000 balance, £100–£200.

A small number of cards charge no fee at all — but the 0% period is usually much shorter, typically around 12–14 months. Whether fee-free is better depends entirely on how long you need to clear the debt.

Card type	Transfer fee	0% period (2026)	Best for
Longest deals	~3–4%	24–36 months	Larger balances needing more time
Mid-range deals	~2–3%	18–24 months	Most people
Fee-free deals	0%	12–14 months	Smaller balances you can clear quickly

As of 2026, the longest 0% balance transfer deals run to around 30–36 months with fees of roughly 3–3.5%.

What happens when the 0% period ends?

The interest rate reverts to the card’s standard rate — typically 21–26% APR in 2026. If you have any balance left, that’s what you’ll be charged on it. The savings from the transfer can unwind very quickly.

This is the only real danger with balance transfers. The card is not a solution — it’s a window. The solution is clearing the debt inside that window.

Who qualifies for a 0% balance transfer card?

Approval depends on your credit history. The longest 0% deals are reserved for people with good credit scores. If your score is fair or lower, you may be offered a shorter 0% period or a higher fee.

You also cannot transfer a balance from a card with the same provider — so if you have a Barclaycard, you can’t transfer to another Barclaycard. You need to move to a different lender.

What should you avoid when using one?

• Don’t use it for new spending. Most balance transfer cards charge full APR on purchases from day one. Keep a separate card — or cash — for spending.
• Don’t miss a payment. Missing the minimum payment can cancel the 0% deal immediately, reverting your balance to the standard rate.
• Don’t transfer and forget. Set up a direct debit for a fixed monthly amount and treat it like any other bill.
• Don’t apply for multiple cards at once. Each application leaves a mark on your credit file. Be selective.

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Marcus’s story: how he cleared £3,000 without paying a penny in interest

Marcus, 31, had £3,000 on a credit card at 29.9% APR. He was paying £80 a month — but roughly £60 of that was interest. At that rate, it would take him years and cost him hundreds in interest charges.

He applied for a 0% balance transfer card, got approved, and moved the £3,000 across. The transfer fee was £90 (3%). He set up a standing order for £130 a month — the exact amount needed to clear the balance in 24 months — and put the old card in a drawer.

Twenty-four months later: balance gone. Total cost of the debt: £90. Not the hundreds he would have paid staying put.

The £90 fee wasn’t free — but it was a bargain compared to the alternative.

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The M&G System: do this this week

1. Work out your monthly clearing payment. Divide your total balance by the number of months in the 0% period you’re aiming for. That’s your monthly direct debit. Add a 2-month buffer to the period you choose — life happens.
2. Compare cards on a comparison site (MoneySuperMarket, MoneySavingExpert). Filter by 0% period length and fee. Pick the one whose period covers your clearing timeline.
3. Set the direct debit on day one. The moment the transfer completes, set up a monthly payment from your current account for your clearing amount. Do not wait until the first statement arrives.

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If you want to work out exactly how long it’ll take you to clear your debt — and what a balance transfer would actually save you — use the free Debt Calculator at moneyandgrowth101.com/tools/. It’ll give you the numbers in under a minute.

And if you want to talk through your full debt picture — not just one card, but all of it — book a free Money Clarity Call. It’s 20–30 minutes, no pressure, just clarity on where you stand and what to do next.

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Frequently asked questions

Can I transfer a balance to any credit card?

No. You cannot transfer between cards from the same provider (e.g. one Barclaycard to another). You must move to a different lender. Most major UK banks offer balance transfer products, so there are plenty of options.

Does applying for a balance transfer card hurt my credit score?

A new application leaves a hard search on your credit file, which can dip your score slightly in the short term. This typically recovers within a few months. Applying for several cards in quick succession is more damaging than a single application.

What if I can’t clear the balance before the 0% period ends?

You have two options: transfer the remaining balance to a new 0% card (if you’re eligible — and note your credit file will now show the original transfer), or ensure you’ve at least reduced the balance significantly so the revert rate is less damaging. Plan from day one to clear it within the period.

Can I use a balance transfer card for everyday spending?

Technically yes, but it’s usually a bad idea. New spending on a balance transfer card typically attracts the full standard APR from the moment you spend. Any payments you make usually clear the 0% balance first, meaning your purchases sit accumulating interest. Keep spending and transferring separate.

Is there a minimum amount I can balance transfer?

Most providers set a minimum transfer of £100. There’s usually also a maximum — typically a percentage of your credit limit on the new card. If your limit is £3,000, you may only be able to transfer up to £2,700, for example.

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Related reading: The 3 Debts to Clear First (and Why) · How to Clear Debt on a Normal UK Salary · Klarna, Clearpay & BNPL: The Trap in “Pay in 3”

The short version: Not all debt costs the same, and clearing it in the wrong order means you pay significantly more in interest than you need to. The three debts to tackle first are your overdraft (typically 35–40% EAR — the most expensive debt most people have), your most expensive credit card (average APR around 25%, but varies widely), and any store cards or high-rate catalogue debt. Clear those in that order, before worrying about anything else, and you stop the biggest leaks first.

Most people try to pay off debt by paying a bit off everything at once.

A bit extra on the credit card. A bit towards the overdraft. Some towards the catalogue. Feels balanced. Feels like progress.

But it’s probably costing you hundreds of pounds a year more than it needs to — because not all debt is equally expensive, and paying the cheapest one first while your most expensive one compounds is quietly painful.

I’ve worked inside financial institutions for a decade. The way debt products are designed — the pricing, the default rates, the minimum payment structures — is not in your favour. Knowing which to hit first changes the maths significantly.

Why does the order you clear debt in matter so much?

Because interest is charged daily on most consumer debt. The longer the balance sits, the more it costs you — and the maths compounds. £1,000 on a card at 40% APR costs you around £400 a year in interest. £1,000 on a 0% card costs you nothing.

If you’re making extra payments and spreading them evenly across both, you’re reducing the 0% balance (where it costs you nothing) and the 40% balance (where it’s bleeding £400 a year) at the same rate. Concentrating everything on the 40% card first and ignoring the 0% card until it’s gone saves you real money.

The order matters. Here are the three to tackle first.

Debt 1: your overdraft (clear this before almost anything else)

The arranged overdraft is one of the most expensive forms of consumer debt in the UK — and one of the most overlooked, because it doesn’t feel like debt in the way a credit card does. It just feels like your account is a bit low.

The rates are severe. As of 2026, the major high-street banks charge:

Bank	Arranged overdraft rate (EAR)
HSBC	39.9%
NatWest	39.49%
Santander	39.94%
Barclays	35.0%

A £500 overdraft used for a full month at 39.9% EAR costs around £16. That sounds modest until you realise that many people dip into and out of an overdraft every month — meaning they’re paying that fee, or something close to it, twelve times a year.

The overdraft also has a psychological cost that credit card debt doesn’t: it means your account starts every month behind zero. You get paid, the overdraft partially refills, and you’re spending your month digging back to a position you were already in last month. It’s a loop that’s very hard to break without specifically targeting it.

The M&G System approach: treat your overdraft as your number one debt. Stop using it immediately (redirect any purchase you’d put on the overdraft to a 0% card if possible), then set an amount to repay it each month until it’s gone. Once it’s clear, that cleared space becomes your emergency buffer — not a spending resource.

Debt 2: your most expensive credit card

The average credit card APR in the UK is currently around 24–25%, but the range is vast — from around 20% on a mainstream card to 40%+ on store cards and cards designed for people with thin credit histories.

Once your overdraft is clear, rank your credit cards by interest rate (not balance) and put every extra penny onto the most expensive one. Pay the minimum on everything else. Ignore the fact that another card has a larger balance. The interest rate is the cost — and you’re attacking cost, not size.

Two things worth checking before you start:

• Are any of your cards 0% deal currently? If so, they don’t need to be in the priority order — they’re not costing you anything right now. Check when the 0% period ends and put that date in your calendar. The moment a card reverts from 0% to its standard rate, it moves into the priority order immediately.
• Can you shift any balance to a 0% transfer card? If your credit score supports it, a balance transfer to a 0% card (typically with a 2–3% one-off fee) can dramatically reduce the interest clock on a high-rate balance. It’s worth checking — but don’t let the option become a delay tactic.

Debt 3: store cards, catalogue debt, and high-rate personal loans

Store cards are among the most expensive consumer credit products available in the UK. Rates of 30–40% APR are common — often higher than standard credit cards — and they’re frequently opened at checkout with minimal friction, which means people sometimes don’t realise what rate they’re on.

Catalogue debt (Next Pay, Very, Studio, and similar) often runs at similarly high rates, and the minimum payment structures are designed to extend the repayment period as long as possible.

If you have a personal loan at a fixed rate, it’s worth checking exactly what that rate is. Personal loans from mainstream lenders often sit at 6–12% — far lower than the debts above. If that’s the case, it drops in priority behind all the above. Don’t overpay a 7% personal loan while a 39% overdraft is still open.

What about student loans, mortgages, and 0% deals?

Three types of debt that don’t belong in the priority list above:

• UK student loans (Plan 1, 2, or 5). These repay as a percentage of income above a threshold — not as a fixed debt you can meaningfully attack with extra payments in most cases. Don’t overpay a Plan 2 student loan while credit card debt is open. The interest rates and repayment mechanics are different from consumer debt.
• Mortgages. Usually the lowest-rate secured debt you’ll have. Once consumer debt is clear and an emergency fund is in place, overpaying a mortgage can make sense — but it’s Step 4 in the M&G System, not Step 2.
• 0% purchase or balance transfer credit cards. These are costing you nothing right now. Pay the minimum. When the deal ends, they re-enter the priority order at whatever rate they revert to.

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A real example: Michael’s debt stack

Michael, 30, had four debts when he sat down to write the list: a £400 overdraft (39% EAR), a £1,200 credit card at 24% APR, a £600 store card at 39.9% APR, and a personal loan of £3,000 at 8.9% APR.

His instinct was to chip away at the loan because the balance was biggest. But by interest rate, the order was: store card (39.9%) → overdraft (39%) → credit card (24%) → loan (8.9%).

He set minimum payments on everything except the store card, which he cleared in three months. Then the overdraft, cleared in two. Then the credit card. The personal loan, at 8.9%, he continued paying normally — no extra. By attacking in order of cost rather than size, he saved around £380 in interest compared to his original “pay everything evenly” plan.

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The M&G System: this week’s move

1. Write the full list. Every debt, every balance, every interest rate. If you don’t know a rate, look it up on your statement or online banking — it’s there. You cannot prioritise what you haven’t measured.
2. Rank by interest rate, highest first. This is your order of attack. Set minimum payments on everything else.
3. Put every extra pound at number one. Even £20/month extra on the right debt makes a meaningful difference over a year. The compounding works against you when you ignore it; it works for you when you target it.

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See your full debt picture in one place

The free Debt Calculator lets you list every balance and interest rate, then shows you exactly how much interest you’re paying across all of them — and what changes if you shift the order. It’s built specifically for this step.

Get the free Debt Calculator →

Or if you’d like to talk through your specific situation, a free Money Clarity Call is 20–30 minutes — no pressure, no pitch, just clarity.

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Frequently asked questions

Should I clear my smallest debt first for motivation?

The debt snowball method (smallest first) can work well if motivation is genuinely the barrier — clearing a debt completely gives a psychological win that keeps you going. But it costs more in interest than the debt avalanche (highest rate first). If you can stay motivated either way, go by rate. If you need quick wins to stay on track, smallest first is still far better than no plan at all.

Should I save while paying off debt?

For most people: clear high-rate consumer debt first, then save. The maths is simple — if you’re paying 35% on an overdraft and earning 4% in a savings account, every £1 in savings is costing you 31p per year in net interest. The exception is a small emergency buffer (£500–£1,000) to prevent the next unexpected cost from adding to the debt. Build that first, then focus entirely on clearing the expensive debt.

Is it worth getting a 0% balance transfer to clear credit card debt?

Yes, if you qualify for one and the fee makes sense. A typical balance transfer fee is 2–3% of the amount moved — paid once upfront. If your current card is at 24% APR and you have 12 months to clear the balance at 0%, you’ll save significantly more than the transfer fee. The risk: if you don’t clear it before the 0% period ends, the rate reverts — often to a high standard rate. Treat the 0% end date as a hard deadline.

How do I know what interest rate I’m paying on my overdraft?

It’s shown in your bank’s terms and conditions, on their website under current account fees, and sometimes in your monthly bank statement. The major high-street banks now charge between 35% and 39.9% EAR on arranged overdrafts. If you’re using an unarranged overdraft (going below an agreed limit), the rate is typically the same or higher, plus potential additional charges.

What if I’m in serious debt and struggling to make minimum payments?

This is the moment to contact a free debt charity — before you miss payments, if at all possible. StepChange and MoneyHelper provide free, confidential advice and can help you understand all your options, including debt management plans, Individual Voluntary Arrangements (IVAs), and — in serious cases — bankruptcy. These options affect your credit file significantly, but they exist because the alternative (continuing to drown) is worse. The earlier you contact them, the more options are available.

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Related reading: How to clear debt on a normal UK salary · The truth about buy now pay later · The M&G System: the simple money system that’s hard to get wrong

The short version: Buy now, pay later (BNPL) like Klarna and Clearpay splits a purchase into interest-free instalments — which is genuinely fine if you could already afford it. The trap is that it makes overspending frictionless, missed payments now show up on your credit file, and until each agreement is FCA-regulated you have fewer protections than with a credit card. From 15 July 2026, new BNPL agreements come under FCA rules. The one safe rule: only use BNPL for something you could pay for outright today.

“Pay in 3. Interest-free. No fees.”

It sounds like a favour. Split a £120 purchase into three chunks of £40 — where’s the harm?

And used well, there isn’t much. That’s what makes BNPL slippery. It’s not a payday loan with a scary rate. It’s frictionless, interest-free, and everywhere — which is exactly the problem.

I assessed customers’ credit risk at Barclaycard. The thing that quietly sinks people is rarely one big bad decision. It’s lots of small, reasonable-looking ones — and BNPL is built to feel reasonable every single time.

What is buy now, pay later — and how does “pay in 3” work?

BNPL lets you take something home now and pay for it later, usually interest-free, in instalments.

Klarna Pay in 3 splits a purchase into three payments: one at checkout, then two more, 30 and 60 days later. Pay in 30 lets you pay the whole amount within 30 days.

Clearpay typically splits into four payments over six weeks.

No interest, if you pay on time. That’s the genuine appeal — and for a planned purchase you can afford, it can be a reasonable way to spread a cost.

Is BNPL actually bad?

Not inherently. The problem isn’t the product — it’s the behaviour it encourages.

BNPL removes the friction that normally makes you pause before spending. There’s no interest to concentrate the mind, no monthly statement landing, and the payments are small enough to feel like nothing.

So two things happen. You buy things you’d have thought twice about. And you stack multiple plans across different retailers until you’ve genuinely lost track of what leaves your account and when.

It’s telling that the debt charity StepChange has found BNPL users are twice as likely as other borrowers to be using credit to cover essential bills. That’s the line between “spreading a cost” and “quietly sinking” — and BNPL blurs it.

Does Klarna affect your credit score?

This has changed, and a lot of people haven’t caught up.

Since June 2023, Klarna reports both on-time and missed Pay in 3 and Pay in 30 payments to the UK credit reference agencies Experian and TransUnion. So your BNPL use now shows on your credit file.

Used well, that can actually help — a record of paying on time is a positive marker. But miss a payment and it works the other way: a missed payment or a default can be recorded, and negative markers can stay on your file for up to six years, making future credit (including a mortgage) harder and more expensive.

Story: Maya’s warning Maya took out a £500 Klarna plan for a laptop. She missed one payment when her hours were cut. That triggered late fees, a penalty, and a mark on her credit file. A year later she was turned down for a £35-a-month phone contract — not because she couldn’t afford it, but because that one slip had flagged her as a risk. One missed payment on a “harmless” instalment plan cost her access to ordinary, everyday credit.

One missed payment. That’s all it takes.

What protections do you have with BNPL?

Historically, fewer than you’d think — which is the other half of the trap. Because most BNPL hasn’t been regulated like a credit card, you’ve had weaker protection if something went wrong.

That’s changing. From 15 July 2026, new BNPL agreements come under FCA regulation. In practice that means:

• Affordability checks before you’re lent to.
• Clear, upfront information about your agreement and what happens if you miss a payment.
• Support if you’re struggling, including signposting to free debt advice.
• Section 75-style protection on purchases over £100 (and up to £30,000) — so the provider shares responsibility if something goes wrong with what you bought.
• The right to complain to the Financial Ombudsman Service if things aren’t put right.

Two important catches, though. These protections apply to agreements made on or after 15 July 2026 — not older ones. And some, like Ombudsman access, take time to come fully into force. So even with regulation arriving, the sensible approach doesn’t change: treat BNPL with care.

The M&G System: the one BNPL rule

• Only use BNPL for something you could pay for in full today.
• If you couldn’t buy it outright, that’s your signal you can’t afford it yet — BNPL doesn’t change that.
• Never run more than one or two plans at once. Stacking is how people lose track.
• Set the payment dates as reminders the moment you buy.

If you’re already juggling BNPL balances, stop adding new ones and make a plan to clear them.

Here’s the honest comparison:

	Pay now (debit)	BNPL (pay in 3)	Credit card (cleared in full)
Interest	None	None if on time	None if cleared in full
Encourages overspending?	No	Yes — frictionless	Some
Shows on credit file	No	Yes (Klarna, since 2023)	Yes
Section 75 protection	No	New agreements from 15 Jul 2026	Yes, over £100
Best for	Anything you can afford	Planned buys you could afford anyway	Everyday spend, cleared monthly

Your next step

If BNPL balances have crept up on you, the first move is simply to see them clearly. The free Debt Calculator lays out what you owe and the fastest, cheapest order to clear it: moneyandgrowth101.com/tools/debt-calculator.

And if it all feels tangled, a free Money Clarity Call is a no-judgement 20-minute chat to help you find the thread: book here.

Frequently asked questions

Does Klarna show up on your credit report? Yes. Since June 2023, Klarna reports both on-time and missed Pay in 3 and Pay in 30 payments to Experian and TransUnion, so your use of it appears on your credit file.

What happens if you miss a Klarna payment? You can face late fees, your account can be frozen to new purchases, and the missed payment can be reported to credit reference agencies. A default can stay on your credit file for up to six years.

Is BNPL regulated by the FCA? From 15 July 2026, new BNPL (deferred payment credit) agreements come under FCA regulation, bringing affordability checks, clearer information, complaints to the Financial Ombudsman Service and Section 75-style protection. Agreements made before that date aren’t covered.

Is BNPL better than a credit card? Neither is “better” — it depends on use. A credit card cleared in full each month gives you interest-free spending, credit-building and strong Section 75 protection. BNPL is fine for a planned purchase you could already afford, but it makes overspending easier and, until recently, offered fewer protections.

The short version: You can buy a car with 0% purchase credit cards and pay no interest — but only if the repayment plan is set up before you spend. Split the balance by the number of interest-free months, set that as a fixed direct debit on each card, and only try it once your existing bad debt is cleared. Done right, it costs a small one-off fee instead of hundreds — sometimes thousands — in dealer finance interest. Done without a plan, it’s just a debt with a deadline.

I needed a car. I didn’t want to drain my savings, and I really didn’t want to hand a dealer thousands of pounds in finance interest.

So I bought it on 0% credit cards and paid no interest at all.

That sentence makes some people wince — putting a car on credit cards sounds reckless. Stay with me, because the difference between clever and reckless here is one thing: the plan.

A quick note on where this comes from: I spent years in financial crime and compliance, including a stint at Barclaycard assessing customers’ credit risk. I’ve seen exactly how credit cards make money from people — and how a small number of people quietly make the cards work for them instead. This is the second kind.

Can you actually buy a car with a credit card in the UK?

Partly. Most dealers won’t let you put the whole price on a card, because they pay a fee on card payments. Many cap the card portion at around half, and ask for the rest another way.

That’s the first hurdle, and it’s solvable. But before any of the mechanics, there’s a bigger question: should you be doing this at all? Hold that thought — I’ll come back to it, because it’s the part that matters most.

How I paid for a roughly £12,000 car without paying interest

Here’s what I actually did.

I needed about £12,000. No single card had a limit that big, so the plan was to split it across two 0% purchase cards, both offering 24 months interest-free. On each card I set a fixed direct debit — the balance divided by 24 — so they’d clear themselves automatically before the 0% window closed.

Then real life threw in a snag. The dealer wanted a deposit and would only take about half the price on a card. So I used a money transfer card — a card that moves cash from your credit limit straight into your bank account for a small one-off fee — to cover the rest as cash, and paid the dealer directly.

The entire cost of the exercise was that one-off transfer fee of around 3% on the part I moved as cash. No monthly interest on any of it.

Set against the dealer’s finance offer — roughly £3,300 in interest over four years at a fairly ordinary rate — that fee was a rounding error.

That’s the difference between using credit and being used by it. Same cards. The same scary APR that frightens most people. But because the repayment plan was running before I spent a penny, the headline rate never got the chance to apply.

Why the plan matters more than the card

This is the whole game, so I’ll say it plainly.

A 0% card gives you an interest-free window — 12, 18, 24 months. If the balance is gone before the window shuts, you pay no interest. If it isn’t, the full rate lands on whatever’s left, and it’s usually 20–40%.

So the plan is simple and non-negotiable:

Divide the balance by the number of interest-free months.

Set that exact figure as a direct debit on the card, starting immediately.

Set a phone reminder for one month before the 0% ends, to check nothing’s left.

Do that and the card clears itself. Skip it and you’ve bought a debt with a deadline.

I also built in a safety net by design. Because the fixed payments bring the balance down at least as fast as the car loses value, the car is always worth more than what’s left owing. If life changed tomorrow, I could sell it and clear the balance with room to spare. That’s not luck — it’s engineered in from the start.

Is this actually a good idea for you?

Here’s the honest answer, and it’s the reason this post isn’t a “hack.”

This is a pro move, not a starter move. It only works if two things are already true:

Your bad debt is cleared. If you’re still paying interest on a card, an overdraft or a Klarna balance, this isn’t your move yet — using it now just digs the hole deeper.

Paying a fixed amount on time, every month, is second nature — not a stretch you’re hoping to manage.

If that’s not you yet, that’s completely fine. It was once true of me too. Build the foundation first — clear the bad debt, get a buffer behind you, make on-time payments automatic. The technique will still be here when you’re ready.

• The M&G System: before you put anything on a 0% card
• Clear the bad debt first. No 0% strategy while you’re paying interest elsewhere.
• Set the plan before you spend. Balance ÷ interest-free months = your fixed direct debit.
• Diarise the deadline. A reminder one month before 0% ends, every time.
• Keep a get-out. Only borrow against something you could sell or cover if life changed.

Here’s how the two routes compare on a ~£12,000 car:

	Dealer finance	Two 0% cards, with a plan
Interest paid	~£3,300 over 4 years*	£0
One-off cost	Usually none	~3% on the cash-transfer portion
Who’s in control	The lender’s schedule	Your fixed direct debit
Risk if you drift	Baked-in interest either way	Full APR on any leftover balance

*Illustrative, based on a fairly ordinary finance rate — your quote will vary.

Your next step

If you’re not yet at the “0% cards” stage, the useful move is to see your debts clearly and get a dated plan to clear them. That’s exactly what the free Debt Calculator does — it shows you the fastest, cheapest order to clear what you owe: moneyandgrowth101.com/tools/debt-calculator.

And if you’d like a second pair of eyes on your whole picture, you can book a free, no-pressure Money Clarity Call — a 20-minute chat to get clear on your next step: book here.

Frequently asked questions

Does buying a car on a credit card hurt your credit score? Not by itself. Using credit and clearing it on time is a positive marker. What hurts your score is missed payments or maxing out your available credit — which is exactly why the fixed-payment plan matters.

Can you put a whole car on a credit card? Usually not. Most dealers cap the card portion (often around half) because they pay card fees, so you’ll typically need a second method for the rest.

What is a money transfer card? A card that moves cash from your credit limit into your bank account for a one-off fee (usually 3–4%), often at 0% for a set period. It’s a tool for planned, disciplined use — not everyday spending.

What happens when the 0% period ends? Any remaining balance starts accruing interest at the card’s standard rate — often 20–40%. That’s why you clear it before the deadline or, at worst, move it to another 0% deal.

To clear debt on a normal salary: list every debt with its interest rate, cover the minimums, then put every spare pound on one debt at a time. Most people save the most by targeting the highest-interest debt first (the avalanche), though clearing the smallest balance first (the snowball) can feel more motivating. Pick one and keep going.

Can you really clear debt on an average UK salary?

Yes — and you don’t need a pay rise or a windfall to do it. What you need is a clear, dated plan and a bit of breathing room in your spending. Most people’s debt feels worse than it is because it’s a vague, anxious blur. Turn it into a list and it shrinks from a monster into a to-do.

In the book, a character called Marcus does exactly this with a stubborn overdraft he’d been carrying for years. Nothing dramatic — just a plan, a date, and a few months of chipping. That’s all most of us need.

A step-by-step debt-clearance plan

1. List every debt. Credit cards, overdraft, Buy Now Pay Later, loans, that money you owe a mate. For each, write the balance, the minimum payment, and the interest rate (APR).
2. Find your spare pound. Use your spending plan to find an amount — anything — you can throw at debt each month on top of the minimums.
3. Pay minimums on everything. This keeps you out of trouble and protects your credit file.
4. Attack one debt at a time. Put all your spare money on a single target debt while paying minimums on the rest. Clearing them one by one is far more motivating than nudging them all down at once.
5. Roll it over. When one debt’s gone, take everything you were paying on it and pile it onto the next. This “rollover” is what makes the last few debts disappear fast.

Should I pay off the highest interest or the smallest balance first?

Both work. They just optimise for different things:

• Avalanche — pay off the highest-interest debt first. This costs you the least in interest, so it’s mathematically the fastest and cheapest.
• Snowball — pay off the smallest balance first. You lose a little to interest, but you get quick wins that keep you going.

If your most expensive debt is also fairly small, you’re in luck — both methods point the same way. If you’ve struggled with motivation before, snowball’s early wins are worth the small extra cost.

What about overdrafts and Buy Now Pay Later?

Overdrafts are sneaky because they don’t feel like debt — they just feel like “my normal balance.” But many arranged overdrafts charge around 39.9% APR, which makes them some of the most expensive money you can borrow. Treat your overdraft as a real debt to clear, then build a small buffer so you never dip back into it.

Buy Now Pay Later (Klarna, Clearpay and friends) is the other quiet trap. “Pay in 3” feels free, but it spreads a habit across your whole month until you lose track of what you actually owe. Add every BNPL balance to your debt list so it can’t hide.

Want a dated payoff plan? The calculator shows your order and finish date.

Want it built around your numbers, with someone in your corner? That’s what the M&G Financial Control Reset is for.

What about 0% balance transfers?

A 0% balance transfer can be a brilliant tool — it pauses the interest so all your payments hit the actual debt. But it only works if you (a) have a clear plan to clear the balance before the 0% period ends, and (b) stop spending on the card. Used with a plan, it speeds things up. Used as a way to avoid the problem, it just moves it. Clearing the debt is step three of the M&G System — once it’s gone, you build your buffer.

Want a dated payoff plan? The calculator shows your order and finish date.

Want it built around your numbers, with someone in your corner? That’s what the M&G Financial Control Reset is for.

Frequently asked questions

Should I save or pay off debt first?

Usually, clear expensive debt first — paying off a 39.9% overdraft beats earning a few percent in savings. The one exception: keep a tiny starter buffer (even £100–£500) so a surprise bill doesn’t push you straight back into borrowing.

Will paying off debt hurt my credit score?

No — paying down debt generally helps your credit profile over time. Keeping accounts in good standing and lowering how much of your available credit you use are both positives.

What if I can’t even afford the minimum payments?

That’s a different situation, and you don’t have to face it alone. Free, confidential help is available from organisations like StepChange and National Debtline — speaking to them early gives you the most options.

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Your next step

If you’d like a plan built around your numbers — with someone in your corner to keep you on track — the M&G Financial Control Reset is a five-session, one-to-one programme, £297 flat fee. Work with me →

Money & Growth 101 is plain-English personal finance for your 20s and 30s — no jargon, no shame, just a clear next step.

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