What is persistent debt?
Persistent debt is when you have paid more in interest, fees and charges over an 18-month period than you have towards the amount you’ve borrowed on your credit card. This can happen if you’ve been making minimum or low monthly payments over a long period of time. Doing it this way means it takes you longer to repay what you owe, and costs you more in interest.
How will I know if I'm in persistent debt?
We’ll communicate with you when you are in persistent debt. This timeline shows you what we'll do at each stage.
I’m in persistent debt. What can I do to get out of it?
When we contact you at 18 months to advise you that you’re in persistent debt, we’ll give you information relating to a voluntary payment you could make to help you get out of 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. Making the voluntary payment will also help you repay your balance more quickly and reduce the total amount of interest you pay. You can start paying it in any month, although it’s worth bearing in mind that the earlier you start the lower the voluntary payments will be.
If you're able to pay more than the minimum payment, or set up a fixed monthly payment, this will also help you get out of persistent debt.
Use our repayment calculator to see how doing this could make a difference to the time it takes you to repay your balance and the interest you pay.
Here are a few options which could help:
Complete our budget planner
This will give you a good idea of what income and outgoings you have, and you’ll be able to review an increase to your current monthly payments accordingly.
Pay more than the minimum amount
If you're able to begin making fixed monthly payments instead of the minimum amount, you could pay off your balance more quickly, and pay less interest.
Find out more about amending the amount you’re paying.
Make additional payments whenever possible
When you have some extra cash at the end of the month, consider using it to make an additional payment to your credit card to bring the balance down further.
How much should I pay?
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.
Fixing your payment could be another option if you want to budget for the same amount each month. To see how long it would could take to repay your balance by making fixed monthly payments, and how much interest you’d pay, take a look at our repayment calculator.
Please make sure you can afford any increases before you change your monthly payments. If you're experiencing financial difficulties and would like to talk to us about your overall lending requirements, please get in touch as we want to help.
What happens if I stay in persistent debt?
If you’re still in persistent debt after another 18 months, we’ll write to you and explain your options.
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, we may suspend your card to prevent you from increasing the balance further.
How increasing monthly payments could make a difference
If you're able to pay more than the minimum payment, or set up a fixed monthly payment, this will help prevent you from getting into persistent debt. This will also reduce the time it takes to repay your balance and the amount of interest you pay.
Use our repayment calculator to see how doing this could make a difference.
This table shows the positive impact it has on the interest you pay and the time it takes to repay.
| If you make monthly payments of | How long will it take to clear your balance? | How much interest will you pay? |
|---|---|---|
£141 minimum payment – this decreases as your balance goes down |
32 years, 7 months | £8,799 |
£142 fixed payment |
4 years, 9 months | £3,003 |
£160 fixed payment |
3 years, 11 months | £2,419 |
| If you make monthly payments of |
£141 minimum payment – this decreases as your balance goes down |
|---|---|
| How long will it take to clear your balance? | 32 years, 7 months |
| How much interest will you pay? | £8,799 |
| If you make monthly payments of |
£142 fixed payment |
| How long will it take to clear your balance? | 4 years, 9 months |
| How much interest will you pay? | £3,003 |
| If you make monthly payments of |
£160 fixed payment |
| How long will it take to clear your balance? | 3 years, 11 months |
| How much interest will you pay? | £2,419 |
Look at alternative ways to pay
Credit cards give you flexibility on how you repay your balance but aren’t designed for long-term borrowing. Depending on how you use your card, there may be cheaper ways to borrow over a longer period. For example, it might be cheaper to repay the balance by using a loan at a lower interest rate. If you’d like to discuss other options available to you, give us a call on 0345 740 4404.
I’m worried about being in persistent debt
We understand that everyone’s circumstances are different. If you’ve any concerns, please get in touch with us.
Call us on 0800 028 7183
Lines open:
- Monday to Friday 08:00 to 18:00
- Saturday – 08:00 to 16:00
Please note, lines will not be open on public holidays.
If you’d prefer to get independent advice, you could try these free services: