Need help reading this page? Click to activate Recite Me popup.

Persistent debt

What you need to know about persistent debt and how you can reduce the cost of your credit.

What is persistent debt?

The Financial Conduct Authority (FCA) defines persistent debt as when you are paying more in interest, fees and charges than you are paying off your credit or store card balance, over a period of 18 months or longer.

Without increasing your payments, it could take several years and cost you more in interest and charges, before you’ll repay your balance.

Persistent debt applies to credit or store cards because your payments can be fairly flexible.

We’ll get in touch to let you know if we think you’re in persistent debt and give you practical advice to help you move forward.

Reduce your credit cost by paying more

When you get your statement, you’ll see that you need to make a minimum payment by a set date. You should pay this on time to avoid fees or losing any promotional interest rates. It could also damage your credit score if you miss any payments.

Making extra payments when you can afford to do so, will help you reduce your overall balance. We understand this may not always be possible. It’s important to know constantly paying just the minimum is an expensive way to borrow and you’ll be paying more overall.

If you continue to pay more in interest, fees and charges than off your balance for 36 months, we’ll look at other ways we can help you clear your balance more quickly. This may include stopping your card or lowering your credit limit.

Why paying more matters

Here’s an example based on a balance of £3,000 with an effective interest rate of 24%.

Paying the minimum costs you the most

Paying the minimum costs you the most

Starting at £84 and reducing over time.

You’ll repay your balance in:

28 years and 3 months

Interest paid: £5,214

Total paid: £8,214

Paying a fixed amount costs you less

Paying a fixed amount costs you less

At £84 each month.

You’ll repay your balance in:

4 years and 10 months

Interest paid: £1,866

Total paid: £4,866

Paying a little more costs you the least

Paying a little more costs you the least

At £124 each month.

You’ll repay your balance in:

2 years and 9 months

Interest paid: £981

Total paid: £3,981

This example assumes that you don’t use your credit card, no additional fees or charges are incurred, and the interest rate doesn’t change. The minimum payment is calculated at 1% of the outstanding balance, plus standard interest, fees and charges.

Understand minimum payments

Extra support

If you can't afford to repay any more

If you’re worried, you don’t need to wait for us to get in touch. We’re here to talk about your money worries and to help you find practical ways to deal with them. The sooner you let us know there’s an issue, the easier it will be for us to deal with it together.

Get help with money worries

Budget calculator

Credit card support

You can make payments online, by phone, in branch or by post.

Use our guides to learn more about managing your credit card and how to stay in control of your spending, balance and repayments.

Ways to pay your credit card

Tips for managing your credit card

Get free help and advice

You can also go to these organisations for free advice and support with money worries:

PayPlan logo

PayPlan

Free, simple debt advice.

Call: 0800 280 2816

Mon-Fri 8am-8pm and Sat 9am-3pm.

PayPlan

StepChange logo

StepChange

Get expert advice and free debt management help to manage your debts.

Call: 0800 138 1111

Mon-Fri 8am-8pm and Sat 8am-4pm.

StepChange

National Debtline logo

National Debtline

Free help and advice on dealing with your debt.

Call: 0808 808 4000

Mon-Fri 9am-8pm and Sat 9.30am-1pm.

National Debtline

More help

There are more organisations that can offer you free, independent help and advice for your money worries.

Get independent help and advice

Persistent debt - FAQs

  • We'll write to you:

    • If you've paid more towards interest, fees and charges than on repaying your credit card balance, for a period of 18 months or more. This letter will include information and tips on repaying your balance sooner to cut your borrowing costs.
    • 9 months after that, we’ll let you know if you’re on track and are paying more off your balance than in interest, fees and charges. If not, we’ll explain what to do and what happens next.
    • If you're still paying more in interest, fees and charges than off your balance at 36 months, we'll let you know how much to repay each month.

    We may send reminders and suggestions in between, if we think it might help you.

    Any action we take is aimed at helping you to cut your borrowing costs and repay your balance more quickly.

  • If your account has been in persistent debt for three years, a recommended payment amount will start to feature on your monthly statements.

    By paying this amount each month, it’ll help you to repay your balance more quickly.

    The recommended payment amount will include your minimum payment, any overdue payments, and will take into account if your card is still being used. As a result, the amount can vary month to month, so make sure you keep an eye on your statements.

  • If your account has been in persistent debt for three or more years, and you are not paying the recommended monthly payment, you may lose the ability to make further transactions with your credit card. This is to help you make progress with repaying your balance.

    If you need your credit card for essential living expenses, get in touch so we can find a way to help.

  • Having an account in persistent debt doesn’t directly affect your credit score, but missing payments or making late payments could.

    Find out what affects your credit score

  • If you’re worried about money or repaying your balance, please let us know. We’re here to help you and will explain all your options.

    Get help with money worries

Managing your money

With the rising cost of living, we have the tips and tools to help you manage your money. Whether you are budgeting, borrowing, saving or supporting others we're here to help.

Help manage my money

Managing your money

With the rising cost of living, we have the tips and tools to help you manage your money. Whether you are budgeting, borrowing, saving or supporting others we're here to help.

Help manage my money