Credit card debt is rising in the UK - 5 ways to avoid arrears and stay in control

Credit cards can be a useful way to spread the cost of big purchases, cover unexpected expenses and even earn rewards.

However, as the cost of living up the pressure on household budgets default rates are rising on credit cards and other forms of unsecured lending, according to Bank of England data.

Credit card debt can quickly mount up if you don't stay in strict control of spending.

When you are struggling to meet minimum repayments or worried about the amount you owe, taking early action can make all the difference.

Pay more than the minimum if you can

Making only the minimum payment keeps your account up to date, but it also means you'll pay far more in interest and could remain in debt for years.

Even paying a little extra each month can reduce the total interest you'll pay and help clear your balance faster.

If your budget allows, consider increasing your monthly payment by £10 or £20. Small changes can have a significant impact over time.

One useful way to tackle credit card debt is the “snowball” method.

What is the debt snowball method?

The debt snowball method is a repayment strategy where you:

• Start by listing all your debts from smallest balance to largest

• Focus on either clearing the smallest debt first - or the one with the highest interest

• Continue making minimum payments on the rest

• Once the smallest or highest interest is cleared, move to the next. Then keep repeating

As each balance is paid off, you free up money to “roll” into the next debt, so your repayments build momentum over time, like a snowball growing as it rolls downhill.

Review your budget

One of the best ways to stay on top of debt is to understand exactly where your money is going.

Start by listing:

• Your monthly income

• Essential household bills

• Food and transport costs

• Existing debt repayments

• Any discretionary spending

This can help identify areas where small savings could be redirected towards paying off credit card balances.

Be careful using your credit card for everyday spending

Using a credit card for groceries or household essentials may seem like a short-term solution, but if the balance isn't cleared each month, interest can quickly build up.

Where possible, try to reserve credit cards for planned purchases that you know you can afford to repay.

If you're regularly relying on credit to cover everyday living costs, it may be a sign that your budget needs reviewing or that you could benefit from free debt advice.

Speak to your lender before you miss a payment

If you think you'll struggle to make your next repayment, don't ignore the problem.

Contact your credit card provider as early as possible. Many lenders have dedicated teams that can discuss affordable repayment options or provide temporary support depending on your circumstances.

Missing payments can affect your credit record and may lead to additional charges or interest, so seeking help early is usually the best option.

Get free debt advice if you're worried

If your debts are becoming difficult to manage, you can get free, confidential and independent help.

If you are feeling overwhelmed about the money that you owe, there are plenty of free resources for help.

 Money Helper and Step Change are both free resources that can help you prioritise which debts to focus on and recommend formal debt solutions if necessary.

We also have a better money habits guide which gives some tips on how you can reduce your spending and improve your budgeting skills.