What is persistent debt?

Persistent debt is when you are making small payments but not paying back what you owe. It applies to credit cards, store cards and catalogues.

Do I have a persistent debt?

You do, if you have:

• Only made small payments for 18 months or more
• Paid more towards interest, fees and charges than you have towards the amount you borrowed

Your monthly credit card, store card or catalogue payment covers two things:

1. An amount to reduce the balance
2. An amount for interest and charges

You will stay in persistent debt when you only make minimum payments. This is because a lot of your payment goes towards interest and charges.

You reduce your balance quicker if you pay more than the minimum payment. This is because more of your repayment goes towards the balance.

Should I pay more than the minimum?

By paying a little more than the minimum payments each month you:

• Reduce interest payments
• Pay off your balance more quickly
• Save money in the long run

Before paying more you need to check you can afford this. Think about all the payments you need to make.

Cannot increase your payments?

If you are worried about money and feel you might have a debt problem, we can help. Get free debt advice online.