Chapter 03 — Money & Finance

What's the fastest way to pay off debt?

Mathematically, the avalanche method — paying minimums everywhere and throwing every spare pound at the highest interest rate — costs the least. The snowball method (smallest balance first) is slower but has better completion rates because early wins keep people going.

Follow-up questions

Should I pay off debt or save first?

Build a small starter buffer of about one month's essentials, then attack anything above roughly 8% interest before saving further.

Does debt consolidation help?

Only if the new rate is genuinely lower and you stop adding to the old cards. Otherwise it just moves the balance and extends the term.

How does debt affect my credit score?

Utilisation — balance divided by limit — is a large factor. Getting each card under 30% of its limit typically lifts scores within one or two billing cycles.

Can I negotiate with creditors?

Yes. Hardship plans, reduced interest, and settlement offers are common; ask for the hardship or collections department and get any agreement in writing.

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