Important: This page provides general educational information only and is not regulated financial advice.
What does debt mean?
Debt means money that is owed to another person, company, lender or organisation. It can come from credit cards, personal loans, mortgages, overdrafts, car finance, store cards or Buy Now, Pay Later agreements.
Debt is not always automatically bad. A mortgage, for example, may help someone buy a home. But debt becomes harder when interest, fees and repayments make it difficult to reduce the amount owed.
Why debt grows
Debt can grow because of interest, fees, missed payments, new spending and minimum repayments that do not reduce the balance quickly.
First steps to reduce debt
1. List every debt.
Write down balances, interest rates, minimum payments and due dates.
Write down balances, interest rates, minimum payments and due dates.
2. Stop the balance growing.
Try to avoid adding new spending where possible.
Try to avoid adding new spending where possible.
3. Pay more than the minimum.
Extra payments can reduce the balance faster and lower interest.
Extra payments can reduce the balance faster and lower interest.
4. Use calculators.
Estimate interest and repayment time so the numbers are easier to understand.
Estimate interest and repayment time so the numbers are easier to understand.