Persistent debt

From spotting the signs to getting back on track – we’re here to help

What's persistent debt?

Persistent debt is when you’ve paid more in interest, fees and charges over an 18-month period than you do towards the amount you’ve borrowed on your credit card.

 

This can happen if you’ve only been making minimum or low monthly payments over a long period of time. And it means it’ll take you longer to repay what you owe and ultimately cost you more in interest.

How will I know if I'm in persistent debt?

If you’re in persistent debt, we’ll get in touch to let you know and help you get back on track.

We aim to contact you at three different stages - here’s when you’ll hear from us:

 

18 months

We’ll let you know that over the past 18 months you’ve paid more in interest and charges than you have towards reducing the amount you’ve borrowed. We’ll give you some options, so that by month 36 (or before) you’ll no longer be in persistent debt.

The communication will set out options for you. 

27 months

We’ll let you know if you’re on track or off track to be out of persistent debt by month 36. 

36 months

We’ll let you know whether you’re still in persistent debt. If you are, we’ll offer different options to repay your credit card balance within a reasonable time of up to 4 years. If you don’t take any action at this point, your credit card may be blocked.

How can you avoid persistent debt?

Pay more than the minimum

 

Paying more than the minimum payment or setting up a fixed monthly payment will:

  • help prevent you from getting into persistent debt
  • help you repay your balance quicker
  • reduce the amount of interest you’ll pay.

See the difference paying more could make for you, by entering your latest balance and interest rate into Card Cost's calculator.

Here’s how long it would take to repay an example balance, based on different monthly payment amounts.

 

Say you repay a balance of £5,000 at a single fixed interest rate of 24.9% p.a. without spending any more on the card. 

If you make monthly payments of... ...how long will it take to clear your balance? ...how much interest will you pay?
If you make monthly payments of...

£150

minimum payment - this decreases as your balance goes down

 ...how long will it take to clear your balance?29 years, 6 months  ...how much interest will you pay?£8,098
If you make monthly payments of...

£152

fixed payment

 ...how long will it take to clear your balance?4 years, 4 months  ...how much interest will you pay?£2,834
If you make monthly payments of...

£170

fixed payment

 ...how long will it take to clear your balance?3 years, 8 months ...how much interest will you pay?£2,327

Once you’ve worked out what you can afford to pay each month, the easiest way to do it is by Direct Debit.

To set this up on our App, select ‘Help’, then ‘Chat now’ and type ‘Amend…’ or ‘Set up Direct Debit to pay my credit card’. To do this via Online Banking select ‘Message us’ and send the same message.

If you can’t pay a higher monthly payment regularly but would like to make additional payments when you can, see ‘How do I pay my credit card in the App?’.

Alternatively, you can call us on 03456 100 100.

Complete a budget planner

Completing MoneyHelper's Budget Planner will give you a good idea of your income and outgoings, so you can review your monthly payments often to make sure you’re on track.

How to get out of persistent debt

Pay the voluntary payment or a fixed monthly amount

 

We’ll give you information about voluntary payments at 18 months, when we get in touch with you to let you know that you’re in persistent debt. 

 

The voluntary payment will appear on your statement every month for the next 18 months and will change each month depending on how you use your card. 

 

Paying the voluntary payment will help you pay your balance quicker and reduce the amount of interest you’ll pay. While you can start paying it at any month, it’s worth keeping in mind that the later you start, the higher the voluntary payments will be.

 

The easiest way to pay your voluntary payment is by Direct Debit. To set this up, please call us on 03456 100 100.

 

If you're able to, paying more than the minimum payment or setting up a fixed monthly payment will also help you get out of persistent debt and pay your balance quicker.

 

To set up a Direct Debit for a fixed amount on our App, select ‘Help’, then ‘Chat now’ and type ‘Set up Direct Debit to pay my credit card’. To do this via Online Banking select ‘Message us’ and send the same message.

 

If you’d like to make additional payments yourself, here’s how to set up a one off payment.

Alternative ways to pay

While credit cards give you flexibility on how you repay your balance, they’re not designed for long-term borrowing. So depending on how you use your card, there may be cheaper ways to borrow over a longer period eg repaying the balance with a loan at a cheaper interest rate.

 

If you’d like to discuss other options available to you, give us a call on 03456 100 100.

Speak to us

We understand that everyone’s circumstances are different. So if you’d like to discuss your credit card payments, call our friendly team on 03456 100 130. We’re available 8am-10pm Monday to Thursday, 8am-9pm Friday, and 9am-8pm Saturday and Sunday.

 

You can also find more help and information on our Money Worries and Financial Difficulty pages.

If you’d prefer to get independent advice, here are some free services:

Useful links

Budgeting and money management

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Dealing with financial difficulty

We understand the stress that comes with being in debt and are here to support you whatever way we can, with care and respect.
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Gambling support

If you're concerned about the effects of gambling on you or someone you know, please don't suffer in silence. Help and support is available.
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