Persistent debt

What is ‘persistent debt’?

This is where you pay 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 been making minimum or low monthly payments over a long period of time. This means it will take you longer to repay what you owe and cost you more in interest. This may be referred to as persistent debt or long term credit card debt. There are rules we must follow and guidance we have to give to help credit card customers deal with it.

How will you know if you’re in persistent debt?

If you’re in persistent debt, you’ll receive a letter or email from us, with options on how you can repay your balance. Review the option that relates to you to find out more.

At 18 months then again at 27 months

We’ll send you a letter or an email to let you know that you’re in persistent debt.

This will explain the benefits of increasing your payments to reduce how much of interest you pay.

We’ll also show you ways to reduce your balance (like increasing your Direct Debit or making extra payments) and where to find help.

At 36 months

If you’re still in persistent debt, we’ll write or email to tell you about the following things:

  • How much your persistent debt balance is.
  • The date your persistent debt balance needs to be repaid.
  • Your repayment options, such as setting up or increasing your Direct Debit for a fixed amount. This will be more than your usual minimum payment, to help so that you can start to reduce your balance faster.

You’ll need to make sure the persistent debt balance is paid back within a maximum of 4 years.

If you’re not able to clear the balance or are struggling to make payments, please contact us to talk about your options.

We'll also give you some details about other organisations that can help with debt advice and other information.

What happens after 4 years

If you’ve paid your persistent debt balance in full, then we don’t need anything else from you.

If you have an outstanding balance after 48 months, we’ll write to let you know how much you need to pay and by which date. 

If you’re not able to clear the balance or are struggling to make payments, please contact us to talk about your options.

Once your balance has been fully repaid, your account will be closed. We’ll let you know about this by writing to you.

Why is it important you take action?

Being in debt means you can’t enjoy spending money on things without having to worry about your repayments and can lead to stress and can affect your credit file. Repaying your debt is important for you and gives you more freedom to do the things you enjoy. If you'd like further support, please visit our money worries page.

What can you do?

Paying more each month will reduce the interest you are charged and cut the time that it takes to pay off your balance.

Here's an example of how an increase in payments reduces the interest and the repayment period on a credit card balance of £1,500 with an APR of 15.9%.

With a credit card balance of £1,500 and APR of 15.9%

If you make the minimum payment each month If you make a fixed payment If you increase your fixed payment
Monthly payment Starts at £56 and reduces each month as the balance decreases £75 £100
How much interest you’ll pay
Interest saved by paying more
Time to pay off the balance 10 years and 9 months
2 years
1 year and 5 months

Remember, the only way to avoid this type of debt is to pay off more than the minimum payment, and ideally, as much as you can each month. This way you’ll save money on interest charges and repay your debt in less time.

If you can afford to, one of the ways that might help your account out of persistent debt is to make a one-off additional payment. You can set up or amend a direct debt to fixed amount.