Which debt first?
Lesson 10 of 11 in our free Good Debt vs Bad Debt guide: a 5-minute money game with the key points below.
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Questions you'll answer
Priority bills are covered. Mo has spare money for non-priority debts: a £600 card at 29.9% and a £2,000 loan at 12%. Which approach saves the most interest?
Quick facts
- Rent arrears → Priority. Could put your home at risk.
- Council tax arrears → Priority. Councils have strong collection powers.
- A credit card balance → Non-priority. Important, but the consequences are less severe than losing your home or energy.
- Energy bill arrears → Priority. Could lead to supply problems or a prepayment meter.
- A BNPL plan → Non-priority. Non-priority, though it still needs dealing with.
- Fact: “Free, confidential debt advice is available from charities like StepChange and National Debtline.” — You never need to pay for debt advice.
- Myth: “The snowball method (smallest balance first) never helps anyone.” — It can keep people motivated with quick wins. Avalanche saves more interest, but the best plan is one you stick to.
- Myth: “Ignoring letters makes debt problems go away over time.” — Things usually get harder. Talking to creditors and getting advice early gives you more options.