We aim to make our website as accessible as possible. However if you use a screen reader and require debt advice you may find it easier to phone us instead. Our phone number is 0 8 0 0 1 3 8 1 1 1 1. Calls are free from all major mobile networks.
StepChange Debt Charity logo

Free advice on problem debt
based on what's best for you

Request a call back »
Or call us on 0800 138 1111Mon-Fri 8am-8pm, Sat 8am-4pm

Credit card debt. What to do if you've got credit card arrears.

Credit cards are a popular way to buy items in shops and online and pay the money back in instalments later.

Used wisely they can be useful, but if you’re not careful they can be an expensive way to borrow and can take a very long time to repay.

In this section you’ll find advice about how to get out of credit card debt and ways to reduce your credit card debt. We'll also highlight what you can do to help manage your credit card debt.

Take the test

Worried about credit card debt?

Get expert debt advice & a personalised debt solution

FREE online debt advice   20 mins

Try Debt Remedy

Credit card minimum payments

All credit cards have a minimum amount you must pay back each month.

This will be a percentage of the amount outstanding, usually between 1% and 3% each month. Usually there'll be a minimum amount of £5.

For example, if you owe £1000 on your card a minimum payment of 2% would mean paying back £20 per month.

If you only pay the minimum payment on a card, it will take a very long time to repay. Always try to pay more than the minimum amount if you can afford it.

The Money Advice Service have a useful calculator on their website which lets you check how long it would take to pay off a credit card debt.

Credit card arrears

If you don't pay the minimum payment every month, your account will go into arrears. Your creditor will contact you to demand the missing payments are made, and if you don't do this eventually the account will default and further action may be taken.

For more information on what action a credit card provider can take to collect a debt, see our what your creditors can do section.

Credit card limit

All credit cards have a maximum amount you can spend.

Some cards are aimed at people with a poor credit history and have a low limit of £200 or so. Often these cards have a high interest rate, but if you pay them back on time, they can be a good way to boost your credit rating by showing other creditors that you can be trusted. Other cards have a much higher limit which can go into the thousands. Whether you have a low or high credit limit, it's very easy to run up affordable debts which will take a long time to pay back.

Sometimes your card provider will offer to increase your credit limit, especially if you have a good history of payments. You should think very carefully before agreeing to an increase in your credit limit, and refuse the increase if you don't need it. Some people like a higher limit 'just in case', but there's always the temptation to keep spending and run up a debt you eventually can't afford to pay back.

Interest and charges on credit card debts

Interest on credit cards varies from less than 10% to 70% or more. The rate of interest you're charged will depend on your credit rating.

Some cards give you an interest-free period of up to 60 days on purchases. This means if you buy something and pay off the whole amount within this time you won't be charged any interest.

But some card providers charge interest on purchases straight away, and most will charge interest straight away on money you withdraw from a cash machine.

If you miss payments, you'll get late payment charges on top of the interest. These should be no more than £12 for each missed payment.

Protection when you spend on a credit card

One important benefit of using a credit card is that you get extra cover on larger purchases.

If you use a credit card to pay for something worth between £100 and £30,000, the credit card provider is also responsible for the goods or services provided.

For example, if you paid for a holiday with a credit card but the company went bust, you could claim the money back from the credit card provider. Or if you ordered some items online but they didn't arrive, you could claim the money back from the credit card provider if the seller refuses to refund you.

This cover applies even if you only paid part of the amount with your card.

Joint credit card debt

The law only allows a credit card account to be in one name, so there's no such thing as a joint credit card. But your credit card provider may let you have a second credit card for your partner or someone else to use.

If your card provider has given you a second card, you will be liable for all of the money spent on both cards.

The second card holder is not liable for any of the debt, even the money spent on the card with their name on it.

For this reason, we recommend you think very carefully before asking for a second card.

PPI on credit card debt

In the past, many credit cards were issued with payment protection insurance (PPI) to cover the minimum payments if you became ill or lost your job.

Many of these PPI policies were sold to people who didn't need them or couldn't claim on them. If you think you were mis-sold PPI, you can ask the credit card provider to refund the payments to you. This could reduce your credit card debt, or give you a windfall to help clear other debts.

If you want to try getting PPI refunded, don't pay a claims management company. You can reclaim mis-sold PPI for free in a few easy steps.

Credit card balance transfers

Some credit cards let you transfer the balance from another card. Transferring a debt from a card with a high rate of interest to one with low or 0% interest could help you pay off the debt faster.

But low or 0% interest credit cards are hard to get if you don’t have a good credit rating. This means you can’t rely on balance transfers as a way to deal with your credit card debts.

Also look out for fees when transferring a balance. Most credit card providers charge 2-3% of the amount you’re transferring as a one-off fee. If you’re transferring a balance to take advantage of a lower interest rate, the fees may mean you save less than you expect.

If you do transfer a balance, make sure you cut up the old credit card and close the account. Otherwise, you may be tempted to keep spending on both cards and you’ll end up with two debts.

0% interest credit cards

Some credit cards have an introductory period where no interest is charged. This period varies and some offer 0% interest for 18 months or more.

If you transfer to a 0% interest card, check the rate of interest when the 0% deal ends as this could be high. 

Also check what is covered by the 0% deal. Often this will be for card purchases only and withdrawing money from a cash machine will be charged at a higher rate.

0% deals may end early if you miss a payment.

Credit cards and your credit file

Your credit card provider will share information with credit reference agencies about the way you use your card. This information will help other creditors decide how risky it is to lend money to you.

Like all debts, your credit file will show information about your credit card debts:

  • The balance owed
  • Your payment history
  • Whether your account has defaulted

But credit card providers also share extra information on your credit file which other types of debt don’t show, including:

  • Your credit limit
  • How much you’ve spent each month
  • How much money you’ve withdrawn from a cash machine each month

Credit card debt advice

If you’re struggling to cover the minimum payments on your credit card, it’s time to get independent debt advice. Contact our Helpline on 0800 138 1111 (freephone, including all major mobile networks*) or try our free online Debt Remedy tool.

Helping you become debt free...

"I wish to thank your staff for all the great help they gave me when I was in so much debt.
They were a pillar of support to me." (Leslie, Essex)

Foundation for Credit Counselling (trading as StepChange Debt Charity) is a company limited by guarantee registered in England and Wales (Company No: 2757055 ) and a charity registered in England and Wales (Registered Charity No: 1016630). Registered office: Wade House, Merrion Centre, Leeds, LS2 8NG. Consumer Credit Counselling Service (Scotland) trading as StepChange Debt Charity Scotland is a company limited by guarantee registered in Scotland (Company No: SC162719) and a charity registered in Scotland (Registered Charity No:SC024413). Registered office: 33 Bothwell Street, Glasgow G2 6NL. Authorised and regulated by the Financial Conduct Authority.

* Major mobile networks include Orange/EE, O2, Vodafone, T-Mobile, Three, Tesco Mobile and Virgin Mobile. Call charges from other networks may vary.