Debt

3 guides and tools on debt.

How interest really works against you, which debts to clear first, and what to do when the payments have stopped being manageable.

About this section

Debt is not a single thing, and treating it as one leads to poor decisions. A mortgage at four per cent secured against an appreciating asset and a card at twenty-three per cent funding groceries are different problems with different answers.

Two principles do most of the work. First, the interest rate matters more than the label: a rate above roughly eight per cent generally deserves aggressive repayment ahead of investing, because clearing it is a guaranteed return no market reliably matches. Second, when money is tight, priority is determined by consequence rather than by rate — rent, property tax and energy come before credit cards, even though the cards charge far more, because the consequences of non-payment are categorically worse.

The guides here cover how to assess whether a debt is worth taking, how credit scores actually work (payment history and utilisation dominate; checking your own file changes nothing), and what to do when minimum payments have stopped being affordable.

That last one matters. If you are paying one card with another or choosing which bill to skip, the problem is no longer one that budgeting solves. Free debt advice charities negotiate with creditors and frequently get interest frozen, and contacting one early produces far better outcomes than waiting. Never pay a commercial firm for what a charity provides free.