persistent debt Solutions

Have you received a 'persistent debt' letter?

If you’re making minimum payments to your credit card, store card or catalogue account, we can help.

I have a persistent debt letter

What is persistent debt?

Persistent debt is when you are making minimum payments to your debt, but you are not making progress in paying it off. This is often because the minimum payment is less than the added interest.

Do I have a persistent debt?

You do, if you have:

Only made small payments for 18 months or more
Paid more towards interest, fees and charges than you have towards the amount you borrowed

Your monthly credit card, store card or catalogue payment covers two things:

An amount to reduce the balance
An amount for interest and charges

You will stay in persistent debt when you only make minimum payments. This is because a lot of your payment goes towards interest and charges.

You reduce your balance quicker if you pay more than the minimum payment. This is because more of your repayment goes towards the balance.

Should I pay more than the minimum?

By paying a little more than the minimum payments each month you:

Reduce interest payments
Pay off your balance more quickly
Save money in the long run

Before paying more you need to check you can afford this. Think about all the payments you need to make.

Cannot increase your payments?

If you are worried about money and feel you might have a debt problem, we can help. Get free debt advice online.

How do i pay it off more quickly?

What happens if I pay more?

Just a small change to your monthly repayments could save you money.

If you are not sure you can afford to pay more, we can help you make a budget.

This helps you:

See where your money is going
Make sure all your essential spending is covered
Spot where you can make savings

Our budgeting guides

Watch our video guide to making a budget
Use our template to share your budget with your lenders
Find out how to make the most of your money

If you are worried about credit card bills

You can get free and confidential debt advice online now. We will recommend you the best way to deal with any debts and point you towards other support.

You can also get Breathing Space if you are eligible.

Breathing space stops the people you owe money to:

Adding interest or fees to your debts for 60 days
Taking action to collect what you owe for 60 days

Ways to save money so you can pay what you owe

Once you create a budget, you know where you can save a little money.

Any savings can go towards repayments.

Read our guides to find out how to cut costs.

What should i do with a persistant debt

What are my options?

It is tempting to ignore letters from lenders. Try to think of your wider financial situation.

Try to find ways to pay more each month. This will pay off your balance faster.

What if I do not increase my repayments?

If you can afford to pay more, you really should.

If not, your lender can take action to make you pay more.

They may send letters that sound scary, but they are trying to help. It is better to get out of persistent debt.

If a lender demands more money, contact them as soon as you can. They will discuss ways to deal with the issue.

Here is what can happen as lenders try to make customers increase payments.

You have been making minimum payments for:

18 months
You get a letter warning that you are in persistent debt.

Your creditor asks you to pay more. They want to see you pay more towards your balance within 18 months.
27 months
You get another letter reminding you to pay more.
36 months
Your lender gets in touch again asking you to take action.

They may offer you a way to pay off your account balance within a reasonable time. This is usually three to four years.

They will look at your finances and could suggest:

1. A new payment plan for what you owe at a rate you can afford

2. That you pay what you owe using a loan or another credit card

3. That your minimum payment increases. They will send you a letter if they plan to do this. They will tell you what to do if you cannot afford the new amount

4. They may also suggest lowering your interest rate. To do this, they would have to suspend your account. That would impact your credit file.

Your creditor will suspend your card or account if you do not contact them. This means you cannot use it. You will still be charged fees and interest.

Get in touch with your lender as soon as you can.

How do i repay more of my balance?

How do I repay more of my balance?

Here are some ways to get your account of persistent debt:

Increase your monthly repayments
Repay the balance using credit with a lower interest rate
Cancel this credit card and move the balance to a different one with lower interest
Get a loan you can afford to repay
Shop around for the best deal- use a price comparison site

Use a provider that offers a ‘soft search’ before applying for a new product. This will not affect your credit file.

If you choose to repay your balance with other credit: Make sure you keep up with repayments to avoid extra charges.

Is there anything else I should do to help my finances?

You need to think about your situation and take action that works for you.