Should I save or repay debt first?

Build a small buffer first, then prioritise high-interest debt, then return to building a full emergency fund once the expensive debt is cleared. Doing it in this order avoids the common trap of debt-free progress being reversed by an unplanned expense.

Avalanche or snowball?

Avalanche costs less overall because it targets the highest interest rate first; snowball tends to be easier to sustain because of the early wins from clearing whole accounts. The best method is genuinely the one you will actually finish, not the one that looks best on paper.

Will paying off debt improve my credit score?

Consistent on-time payments and reduced balances generally help a credit score over time, though the effect is gradual rather than immediate. Utilisation on revolving credit in particular tends to improve fairly quickly as balances fall.

How long will it realistically take to become debt-free?

It depends entirely on total balances, rates and how much extra you can consistently direct at them each month. Running your real numbers through a debt payoff calculator gives a specific date rather than a guess, and revisiting it after each account clears keeps the estimate accurate.

What if a debt collector contacts me during this process?

Stay calm, confirm the debt is genuinely yours and the amount is correct, and try to negotiate in writing rather than only verbally. If the situation feels overwhelming, a registered debt counsellor can deal with collectors on your behalf.

Is it worth using a balance transfer to speed this up?

It can help if the new rate is genuinely lower and any transfer fee is smaller than the interest saved, but check the rate after any introductory period ends, since it often reverts to a much higher standard rate.

How to Get Out of Debt: A Step-by-Step Plan

Step 1: List every debt

Record the lender, the balance, the interest rate, the minimum payment and the due date for each account you owe money on. Include informal loans from family or friends, because they still occupy budget and mental space even without a formal contract. The total is very often less frightening once written down than the uncertainty was while it lived only in your head.

Step 2: Stop the growth

Pause new credit use across every account while you work the plan. A repayment plan that adds new debt while clearing old debt cannot succeed, no matter how large the monthly payments are, because the balance is being refilled as fast as it is drained.

Step 3: Build a small buffer first

Set aside a modest emergency amount — even 3,000 to 5,000 — before attacking balances aggressively. Without this buffer, the first unexpected cost, such as a car repair or a medical bill, goes straight back onto credit and undoes months of progress in a single event.

Step 4: Choose a payoff order

Avalanche method: pay minimums on everything, then direct all extra money at the debt with the highest interest rate first. This is mathematically the cheapest approach over time.
Snowball method: pay minimums on everything, then direct all extra money at the smallest balance first. It is slightly more expensive in total interest, but the quick wins of clearing whole accounts keep many people motivated enough to finish.

A worked snowball versus avalanche comparison

Suppose you have three debts: Card A at 5,000 balance and 26 percent interest, Card B at 12,000 at 19 percent, and a loan at 20,000 at 14 percent, with 400 a month of extra money available above the minimums. Avalanche tackles Card A first because it has the highest rate, then Card B, then the loan — this order minimises the interest charged across the whole payoff period, typically saving several hundred to a couple of thousand compared with the alternative order, depending on how long each debt takes to clear.

Snowball instead tackles Card A first anyway in this example because it also happens to be the smallest balance, then Card B, then the loan. In this particular case the two methods agree on order, but where the smallest balance and the highest rate are different accounts, snowball will cost more in total interest while typically producing a fully cleared account sooner, which is the trade-off between the two approaches.

Step 5: Free up cash to attack with

Cancel subscriptions you are not using, renegotiate one large fixed cost such as insurance or a phone contract, and direct any windfall, bonus or raise straight at the target debt rather than absorbing it into general spending. Every extra amount applied goes toward the principal and reduces every future interest charge on that balance.

Step 6: Maintain momentum

When one debt clears, roll its entire former payment onto the next target debt rather than letting it drift back into everyday spending. Keeping the total amount you were paying toward debt constant, just redirected, is what makes the later debts fall away quickly — this is the mechanism behind both the snowball and avalanche methods actually accelerating over time.

If the numbers genuinely do not work

If minimum payments are unaffordable, contact a reputable nonprofit or appropriately licensed debt adviser in your country. In South Africa, debt counselling (debt review) is an NCR-regulated process for over-indebted consumers; check registration with the National Credit Regulator. It is not the same as taking a consolidation loan. Eligibility, costs, legal protections and restrictions differ by country, so get local advice before agreeing to a formal arrangement.

Common mistakes when trying to get out of debt

Attacking several debts at once with small amounts instead of concentrating extra payments on one target.
Skipping the emergency buffer and being pushed back onto credit by the first surprise cost.
Closing the loop too early — reducing payments back to the minimum once motivation fades.
Not recalculating the plan after a windfall or an income change.
Continuing to use the account you are trying to pay off, which offsets the progress being made.

What to do next

List every debt today with balance, rate, minimum and due date, decide between avalanche and snowball based on which you are more likely to stick with, and set the first extra payment amount before the week is out.

How to Get Out of Debt Step by Step