Rules were introduced by the Financial Conduct Authority (FCA) to help credit card customers in this situation avoid long term debt.
If we've contacted you about being in persistent debt, you'll be able to get out of this situation by paying more of the amount you've borrowed on your card than you pay in interest or charges over the following 18 months. Here's some options that could help:
- Complete a budget planner
- Pay more than the minimum amount or make additional payments where possible, see the different ways to pay
This will include the option to move onto a paydown plan. This is where your monthly payment would change to the amount you'd need to pay to clear your balance over 3 or 4 years. This means you'd pay less interest and pay your balance off more quickly.
If you don't get in contact with us at this point, we may suspend your card to prevent you from increasing the balance further.
If we've contacted you about being in persistent debt, we'll be showing a ‘voluntary payment' option on your monthly statement over the next 18 months. Paying this amount every month will ensure you're no longer in persistent debt when we reassess your account at the end of that period. You should always think about what you can afford, but it's one way to make sure you're paying as much towards the rest of your balance as you are towards the interest and charges on your statement.
A good way to explore what a difference increasing your monthly payments could make to the time it takes to repay your existing balance and the interest you'll have to pay is by using a repayment calculator like the one StepChange have available. It's important to remember that the calculator won't take into account any further spending on your card. So you'll need to factor that in when deciding what you can afford to increase your payments to.
There are different ways to change the way you pay to get yourself out of persistent debt. For other options, see our FAQ's.
s.If you're in persistent debt and would like to discuss your options, please contact us.
Further help and support available to you
StepChange
Free debt advice from impartial experts.
Use their Money Health Check to get back on track or call 0800 138 1111
Money Helper
Offering free and impartial money advice as well as tools to help improve your finances.
Visit Money Helper
or call 0300 500 5000
National Debtline
Offering free and independent debt advice.
Visit National Debtline
or call 0808 808 4000
Citizens Advice
Offering free, impartial advice on debt and money, work, benefits and more.
Visit Citizens Advice
or call 03444 111 444