Store card minimum payments
All store cards have a minimum amount you must pay back each month.
The minimum payment is usually just a bit more than the monthly interest charged.
This means 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.
Store cards and persistent debt
If you have a persistent debt on your store card account, it means that you have been making no more than the minimum payment towards your account over the last 18 months.
Store card providers are now obliged by the Financial Conduct Authority (FCA) to contact you if you have a persistent debt according to the following timescales:
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After 18 months of persistent debt
You’ve repaid more in interest and charges than you have towards your balance over the past 18 months. At this point, your store card provider will contact you. They’ll encourage you to take action so that by month 36 (i.e. 18 months’ time), you no longer have the persistent debt.
After 27 months
You’ll be contacted again by the provider if your account remains in persistent debt (in other words you have only made minimum payments). Once again they’ll encourage you to take action.
After 36 months
If you still have a persistent debt on your account, your provider should offer you a way to pay this off within three to four years. They may suggest:
- An affordable payment plan so you can clear the debt quicker or
- Clearing the debt altogether by using a credit product, such as a loan or credit card
If these aren’t suitable, they’ll consider other options such as suspending interest and charges, or reducing your account’s minimum payment. This may involve suspending your account, and could impact your credit file.
Store card arrears
If you don’t pay the minimum payment every month, your account will go into arrears. Charges will be added for each missed payment, usually £12 each time.
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 store card provider can take to collect a debt, see our what your creditors can do section.