Help if you’ve been contacted about persistent debt on your credit card

If you’ve paid more in interest, charges and fees than you’ve repaid on your credit card balance over an 18-month period, you’ll be classified as being in persistent debt.

When this happens, your credit card provider must let you know and offer you help.

They have to:

• ask you whether you can afford to repay more each month
• tell you what would happen if nothing changes, for example, your card could be suspended and your credit score negatively affected
• discuss your circumstances and options with you, if you don't take action.

If you’ve received a ‘persistent debt’ letter from your credit card provider and aren't sure what to do next, StepChange can help. They offer guidance and a free and impartial budgeting serviceOpens in a new window to help you understand and manage your financial situation.

The minimum repayment is the lowest amount you must pay back on time each month to avoid charges and damage to your credit score. Paying only the minimum repayment can help you spread the cost of items, but you'll usually pay expensive interest and won't be clearing much of the amount you owe.

If you can afford to increase your repayments you can often save hundreds, or even thousands of pounds in interest. 

The minimum repayment on a credit card must be set at an amount that at least repays the interest, fees and charges applied to your account, plus 1% of the outstanding balance.

These rules don’t mean credit card providers have to force you to repay more by automatically increasing your monthly credit card repayments. However, some bank or credit card companies have changed their terms and conditions to increase the minimum repayment required to get customers out of persistent debt.

If this happens and you can’t afford the increased repayment, contact your bank or credit company.

Find out more in our section on Talking to your creditors.

Rather than ignoring the letter, the best thing to do is speak to your credit card provider so they can discuss your options with you.

Your credit card company can then help you with a plan to pay off your outstanding credit card balance in a reasonable amount of time.

To help you manage your money, see our guides Beginner’s guide to managing your money and How to save money on household bills.

You might also be able to transfer your credit card balance to a card charging a lower rate of interest or one offering an introductory 0% interest rate. This could mean you’ll pay less interest on your existing debt.

Most credit card providers will usually charge a fee for balance transfers so it’s important to bear this in mind, as well as the length of any introductory period.

Find out more in our section on Managing credit well.

If you don’t think you have enough money to increase your repayments, speak to your credit card provider about your financial situation and ask about the help they can offer. If you have missed a payment, you can use our Debt advice locator tool to find free and confidential debt advice online, over the phone or near to where you live.

Working out a household budget is a great way to understand where your money is going and identify where you can cut back to maximise your income.

If your credit card bill isn’t the only thing you’re struggling to pay, seek free debt advice.

You’ll be connected to someone impartial who can help you find the best solution for your situation.

All advice is confidential, and nobody will judge you. 

If you don’t increase your repayments after your credit card provider has contacted you, they’ll get back in touch around nine months later.

Once again, they’ll usually suggest you increase your repayments if you can afford to.

If you’re still in the same situation nine months later, your credit card provider will have to do one of two things:

1. Offer you ways of repaying over a reasonable period, usually between three and four years. For example, by transferring the balance on your credit card to a lower-interest personal loan.
2. Offer further ways to help you, such as reducing, waiving or cancelling any interest or charges. If they do this, they could also suspend your credit card, unless doing so would have a significant adverse effect on your financial situation. For example, because you depend on your credit card to pay for essential living expenses like your mortgage, rent, Council Tax or food.