How to escape the debt merry-go-round for good

By Hayley Hemmings

Feel like you’re on a debt merry-go-round? Where you spend time trying to reduce debt, only to go and rack it up again?

Considering that the UK is heading towards a credit boom close to levels not seen since the 2008 financial crash, you definitely wouldn’t be the only one relying on credit frequently.

Being stuck in a debt cycle is frustrating to say the least. Just when you think you’re making headway in paying off your debt to get it to a more manageable level, something happens where you decide to spend on credit again and then you’re back to square one.
The reason why this happens is often down to two things. Firstly, the want or need to spend on something that you can’t afford to buy outright and secondly, the lack of willpower to stay the course when you do start reducing your debt.

Beware the danger of the debt cycle

Borrowing money can be useful when you need fund purchases that you’d otherwise have to save for ages to buy. But credit should be used carefully; otherwise you could end up in a pickle to say the least.

Consider this scenario…

Imagine you’re desperate to book a holiday but you can’t afford to pay outright, so you decide to fund the purchase with credit. You know this will max out your credit card again but you figure a week in the sun will be worth it.

Then, unexpectedly, your car breaks down and you have no money for repairs – you don’t even have a balance left on your credit card either!

The only options to get through the situation in this case would be to travel by other means until you can afford the car repairs, or try to get another credit card or loan to fund the expense. In other words, you’ll be facing a fair amount of stress and worry to get this problem sorted out.

Adding to debt when you’re already struggling with managing debt isn’t a good thing to do, but it’s so easy to get caught up in a vicious circle like this.

How to smash the debt cycle

If you think you might be getting into a pattern of dealing with debt in this way, take a look at these practical tips to help reverse the damage.

1. Commit to reducing your debt load each month

It’s not easy to put a stop to spending on credit overnight. But by committing to reducing your debt every day, you can lessen the overall effect of the debt cycle when you do decide to use credit.

Decide how much extra you can afford to overpay your debt every month and then automate the process by changing your direct debit. If you can only afford an extra £20 per month, don’t be disheartened, because any extra payments will help to hit your interest rate where it hurts.

If you’re paying a high rate of interest on a credit card, see whether you can take advantage of a 0% balance transfer to help speed up the process of reducing your debt. Be aware of the fees involved in doing so, which could be as much as 3% of your balance. However, usually the amount you can save in interest will be more than the cost of a transfer.

Wondering whether debt consolidation would help you? That’s a tricky business, so be aware of these things first.

2. Start saving for emergencies

Many a person comes a cropper with their debt by failing to budget for financial emergencies and so they have to turn to plastic again to get through a tricky situation.

Don’t let financial emergencies turn your debt from manageable to out of control. Start putting money aside for an emergency fund. Aim for £500 to start with, then gradually increase this safety net to £1000 and then to the equivalent of three months’ savings. Baby steps, friends.

Looking for other tips to help your bank balance become healthier? Check out this article.

3. Equate “money spent” with “time needed to work”

One way that helps me keep my spending under control is to work out how many hours I’d have to work in order to buy something of a certain value. I don’t do this with necessary costs like food shopping, but if I see something that I want but don’t really need, I absolutely apply this method.

Picture this…

Let’s say you want to experience a swanky new restaurant but you don’t have much money leftover this month and would have to fund dinner on credit. This is effectively money that you’ve not yet earned.

Would it really be worth having to work extra hours so you can afford to repay the credit with interest, just so that you can go and eat some nice nosh?

Although you may not physically have to go and work those extra hours tomorrow, you’re going to have to earn the money first before paying the money back to your credit card provider sometime in the future, right?
The bottom line is that when you borrow on credit, you are going to have to pay the money back. Not tomorrow, but certainly at some point in the future. So weigh up the pros and cons of spending on impulse and whether it’s worth the cost of your money and time in the future.

Manage your money better to help break the debt cycle

To help with budgeting your money for the long-term, check out one of these helpful budgeting apps. They provide a good way of tracking your income and outgoings.

If you find yourself really struggling with managing money and getting your debt under control, there are a number of organisations who can offer professional advice for free:


Citizen’s Advice - they have a wealth of information on how to start dealing with debt, how to budget and how to understand credit.

StepChange - a debt charity that offers free debt advice and they can help you put a debt management solution in place.

National Debtline - they also offer free advice and have plenty of factsheets and information on managing debt.

Top Takeaway

If you want to break the cycle of debt, you’ll not only have to limit your purchases on credit, but also make an effort to continuously reduce your debt load. Work on:


Changing your mindset around credit – even though you may not have to repay the debt anytime soon, it will need to be paid back at some point. That day will come!

Commit to making more than the minimum payment every month. It’s a great habit to get into to help you gradually reduce your debt and your credit rating will reap the rewards!

Control your spending by thinking of credit as money that you’ve not earned yet. Do you really want to spend your cash in the future on something that will give you instant gratification now but nothing more?

Can you relate to being stuck in a cycle of debt?


Author Bio: Hayley Hemmings is a freelance writer, blogger and tea addict from Yorkshire. She’s passionate about money matters, frugal living and loves anything handmade. When Hayley’s not writing, she’s most likely to be found enjoying snuggles with her little girl or walking her border collie through the beautiful Yorkshire countryside.

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