Persistent debt

Do you know if you are in Persistent Debt?

  • Do you just pay the minimum payment on your credit card every month?
  • Do you need to borrow money from friends or family?
  • Are you borrowing more, or using cash advances from credit cards, to pay existing debts?
  • Do you put off opening bills or letters from banks and other lenders?
  • Are you paying bank account charges because of bounced cheques or unpaid bills?
  • Do you pay groceries or utility bills by credit card without clearing the balance each month?

Persistent debt is where over an 18 month period a person has paid more in interest, fees and charges, than they have towards paying off the amount they’ve borrowed. These are potential warning signs that you may be experiencing financial difficulty and you should consider taking action and talk to us now. We also recommend that you seek independent financial advice if you’re unsure about your financial situation.

If we have written to you to advise your credit card account is in Persistent Debt, it will remain in Persistent Debt unless you take steps to reduce your credit card balance. If you can afford to pay more to reduce your credit card balance this will save you money in interest and will also help you pay your account quicker. If you cannot afford to pay more right now, then we have other options that may be more suitable for your situation.

Call our Customer Service team on 0345 607 6500* so they can take steps to help.

Understanding your finances

Understanding your finances is essential to get the right advice. To start taking things under control, we recommend that you take your outgoings away from your total monthly income to figure out what’s left over. At the same time you are doing this, keep in mind the essentials first i.e. rent and mortgage, council tax, and outstanding debts and fines. This way you can review what you spend is on non-essential items in order to cut back until your finances are back under control.

Speak to a member of our team to talk you through your options based on your income and expenditure, in order that we can make things easier in the short term. On determining your financial situation, we may recommend you speak with a organisations who offer free and impartial debt advice and may be able to help you if you’re experiencing financial difficulties. Please find contact details for some of these organisations below:

Free and independent advice

The Money Advice Service
Free unbiased and easy-to-access money tools, information and advice:
England and Wales: moneyadviceservice.org.uk
Scotland: moneyadvicescotland.org.uk

Citizens Advice
For advice and information on debt and other topics, visit your local Citizens Advice Bureau:
adviceguide.org.uk

National Debtline
National Debtline provide free and independent advice over the phone and online:
nationaldebtline.co.uk

StepChange Debt Charity
Confidential debt advice and debt solutions online or over the phone:
stepchange.org

Advice UK
Specialist advice for minority communities and people with disabilities:
adviceuk.org.uk

Legal Aid
Legal aid can help meet the costs of legal advice in a court or tribunal:
gov.uk/legal-aid

Persistent Debt FAQs

See our help section for further guides and to get in touch.

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What is Persistent Debt?

Persistent Debt is where over a period of 18 months you’ve paid more in interest, fees and charges than you’ve repaid of the amount borrowed.

The Financial Conduct Authority (FCA) has introduced new rules designed to help customers avoid this long term credit card debt. Under these new rules, we will write to you to let you know that your account is in Persistent Debt and what options you should consider to pay off the balance more quickly and get out of Persistent Debt.

If your account is still in Persistent Debt a further 18 months after we first wrote to you, we will write to you again. We will ask you to contact us to discuss how you can get out of Persistent Debt.

What do I need to do to get out of Persistent Debt?

If your account is considered to be in Persistent Debt, we’ll write to you to ask if you can afford to increase the amount you pay each month. Paying more towards your credit card balance will save you money in interest and will also help you to repay what you owe quicker.

What will happen if I’ve been in Persistent Debt for 36 months?

We will contact you to let you know what options you should consider to pay off the balance more quickly (usually within three to four years).

You’ll need to contact us to talk about your account. If we don’t hear from you within 30 days we’ll suspend your account which will mean you won’t be able to spend on it.

What will happen if I do agree to pay more each month?

We’ll help you work out how much more you need to pay off each month so that you’ll repay your credit card balance within the next 3-4 years. If you can afford to pay an even higher amount you may be able to get out of Persistent Debt sooner and pay less interest overall. You may also find it easier to set up a fixed payment Direct Debit for this higher amount.

What if I don’t get in touch with you?

If you receive a letter because you have been in Persistent Debt for 36 months, we’ll give you 30 days to get in touch.

If you don’t call us we will suspend your account which will mean you won’t be able to spend on it. You’ll still need to pay at least your contractual minimum payment and you’ll continue to pay more interest than you would if you were able to increase your monthly payments.

What if I don’t want to increase my payments, can you suspend my credit card?

Yes, the new rules say that we must suspend your credit card if you decline to take action to repay your balance more quickly even if you can afford to do so or if you don’t contact us. You won’t be able to use your card for any new spend.

You’ll still need to pay at least your contractual minimum payment and you’ll continue to pay more interest than you would if you were able to increase your monthly payments.

I’m making my contractual minimum payment each month so why are you telling me to pay more?

Keeping up with your contractual minimum monthly payments is the most important thing, but consistently making minimum or low payments for a long time is an expensive way to borrow money. If you can pay off the balance more quickly by increasing your payments you will save money as you’ll be paying less interest and you’ll repay the outstanding balance more quickly.

What should I do now and why should I get in touch?

First of all, please don’t ignore any letters we send you. Give us a call and we can discuss a way forward that works best for you.

You’ll still need to pay at least your contractual minimum payment but we can discuss with you how you can pay off the balance more quickly and get out of Persistent Debt. If your account remains in Persistent Debt for 3 years and you don’t contact us, we’ll suspend your credit card, so you won’t be able to use it for any new spend

What if I can’t afford to pay any more?

These new rules are about helping you save money over the long term, but if you are worried and are finding it difficult to meet your current contractual minimum payments, or can’t make increased monthly payments, call us to see how we can help.

Alternatively, if you would like to speak with someone independently about free, confidential and impartial advice on your finances, you can contact organisations such as:

These organisations provide a source of help and guidance and will be able to give you information about different options available. If you’re already in touch with an organisation giving you financial advice, please let us know and we can deal with them directly.

Does being in Persistent Debt have an effect on my credit report?

Making minimum or low payments over a long period can have an effect on your credit rating. However, there’s nothing on your credit report about you being in Persistent Debt, or that your card may have been suspended due to Persistent Debt, so this won’t affect your credit score.

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Additional support if you’re struggling financially

If you’re worried that you’re struggling with your finances you can obtain free, confidential and impartial debt advice from organisations such as Money Advice Service, StepChange Debt Charity and Citizens Advice. You may also find some useful independent resources using the links below.

The Money Advice Service
Money Navigator Tool
How to prioritise your debts

Financial Conduct Authority
Dealing with financial difficulties during the coronavirus pandemic

Need help?

Can’t see what you’re looking for? Find the help you need in our FAQs or speak to our Customer Support team on
0345 607 6500*

*0345 numbers may be part of the inclusive price plan provided by your phone operator, however please check before you call. Phone lines are open Monday to Sunday 8am to 8pm. Calls are recorded and may be monitored for security, quality control and training purposes.