If you’ve been making minimum payments on your credit card for a while, you may have recently received a letter from your credit card company asking you to increase your monthly payment, or suggesting you do so.
Have you received a letter from your lender warning you that your account is in 'persistent debt'? Find out what this means and what you should do.
The Financial Conduct Authority (FCA) has stated that all customers who’ve been paying more in interest and charges towards their balance for 18 months or more should try to increase their payments.
These guidelines originally only applied to credit cards, but have now been extended to include store cards and catalogue accounts.
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Why is my card provider writing to me about persistent debt?
The FCA has stated that your provider must tell you if your credit card falls under the definition of 'persistent debt'. They also have to:
- Ask you if you can repay more of your debt each month
- Make you aware of other repayment options
- Warn you what could happen if you continue making low repayments
Your creditor isn't trying to force you to pay money you can't afford. Instead, they're acting on rules set out to protect you from a potential debt problem in the future.