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Not sure what to do about ‘persistent debt’ letters?

If you've received a letter about increasing payments to your credit card, store card or

catalogue account, we can help.

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i The advice on this page applies to anyone with personal debts taken out in the UK.

Credit card debt

Persistent debt: What does it mean for my credit card?

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.

cog iconHave 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.

Are you in control of your repayments? Find out with our 60 second repayment checker.

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.

cog iconHave 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.

How likely is it that my credit card could be suspended?

Your card will only be suspended if you've been in persistent debt for at least 36 months.

While your provider would only suspend your card as a last resort, ignoring them or not making any attempt to increase your payments could make a suspension more likely.

If increasing your monthly payment isn't an option, they may suspend the card to prevent your balance getting any bigger.

How can I get my card out of persistent debt?

To help to repay more of the card's balance, you should do one of the following things:

Speak to your credit card provider

They may be willing to suspend interest and charges on your current card for a while. If you’re thinking of moving your persistent debt to a loan or card at another bank, let your current provider know. They may be able to offer you a better deal.

Stop spending on the card and increase your monthly payments

By doing this, you'll see your credit card balance reduce quicker. Use our credit card repayment calculator to work out how much more you’ll need to pay each month to clear your debt quicker [note: the calculator is not optimised for mobile phones].

Consider ways you could pay off this debt quicker

This could include moving your persistent debt balance to a cheaper credit card, or reviewing your budget to see how much extra you could pay each month.

How much of a monthly payment covers my balance?

A monthly credit card payment includes:

  • An amount for interest and charges
  • An amount to reduce what you owe

When you only pay the minimum each month, the credit card debt takes a long time to reduce because your payment mainly goes towards your interest. Only a small portion of the payment goes towards the balance.

If you repay more each month, more of your money will go towards your balance, and you'll pay off your debt quicker. Use the repayment calculator now to find out how much sooner you could pay off your persistent debt with increased payments. 

cog iconHave 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.

How long will it take to pay off my credit card?

Our credit card repayment calculator can tell you how long it would take you to pay off your credit card by only paying the minimum amount. It can also tell you how quickly you could pay it off by increasing your monthly payment.

For example, let's say you owe £2,796 on a credit card that you no longer use. Depending on how much you can pay on top of the monthly minimum payment, there'll be a drastic reduction in what you pay in total over time. persistent-debt-graphic-mobile-final(Note: these figures are based on estimates and will vary depending on your interest rate.)

How do I pay off my persistent debt?

By understanding your budget, you’ll know where you can cut back on spending. You can also start thinking about how much of the money you’ve saved can go towards getting you out of debt.

You can put a budget together now, using our online budgeting tool

Once you understand your budget, you could then consider one of the following options to get you out of persistent debt:

  • Pay the same amount each month - Choose an affordable amount above your minimum payment and stick with it
  • Pay your minimum payment, plus a fixed amount each month  - Paying a few extra pounds every month can make a huge difference. Our repayment calculator can help you work out a fixed monthly payment amount
  • Make one-off additional payments when you can afford them  - You’ll still need to ensure you pay at least the minimum payment every month to avoid breaching the terms and conditions of your credit card, store card or catalogue account

Can you help me with my debts and budget?

Only being able to repay the minimum can be a sign that you’re struggling financially, and may benefit from free and confidential advice on your budget and debts.

We provide advice and solutions to thousands of people who are struggling to pay their debts. We can look at your whole situation and give you information on how best to deal with your debts. Get free debt advice online.

cog iconHave 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.