UK consumer debt hides in overdrafts, credit cards, store cards, catalogue accounts, car finance, Buy Now Pay Later and loans from family that still need to be repaid. If it reduces next month’s freedom, it belongs on the list. A budget that ignores the overdraft is a draft.
Write the register
For each debt, record: who you owe, the current balance, the contractual APR, the minimum payment, whether it is still being used, and whether it is a joint liability. Pull a statutory credit report if you are unsure. The register often reveals a forgotten catalogue or a phone handset plan that is really a loan.
Minimums, then one extra
Pay every minimum, every month. That protects the rest of your credit file and stops penalty fees. Then send every spare pound to one extra target:
- Avalanche: highest APR first. Mathematically cheapest.
- Snowball: smallest balance first. Faster psychological wins, useful if you have abandoned plans before.
Either method beats rotating the extra payment according to mood. Stop using the card you are trying to clear; the budget should fund the spend from the current account instead.
Overdrafts and BNPL
Arranged overdrafts are priced in APR like any other credit. Unarranged overdrafts are worse. If the current account is permanently below zero, the overdraft is not a buffer; it is a loan with a daily habit. Plan as if the arranged limit does not exist, then cut the limit down once the balance stays black.
Buy Now Pay Later is easy to lose in a budget because it looks like a £0 outgoing until a cluster of instalments lands in the same week as rent. Put every active plan in the register. If you cannot say the remaining instalments from memory, you have too many.
When to stop DIY
If you can only pay minimums, if you are behind on rent or energy, or if you are borrowing to pay other borrowing, use free, regulated advice. In the UK that means:
- MoneyHelper (Money and Pensions Service) for guidance and a directory
- StepChange or National Debtline for debt advice
- Citizens Advice for local issues including council tax arrears
- Your local authority if you are at risk on council tax or housing
These services are free. Companies that charge to “write to your creditors” are rarely the right first call. A Debt Management Plan, Breathing Space (the Debt Respite Scheme) or other statutory options should be explained by an adviser who can see the whole picture.
Credit scores, briefly
UK files sit with Experian, Equifax and TransUnion. Scores are lender-specific; a single number is not a moral grade. Paying on time, keeping utilisation down and not opening a cluster of new accounts will do more than any paid “boost” product. Check the file for errors, especially after a house move or a joint account.
Cunealriva does not arrange credit, debt solutions or investments. If you need a product, speak to a firm authorised by the Financial Conduct Authority, or to one of the free advice bodies above.