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Credit card debt

Persistent debt: What does it mean for my credit card?

If you’ve been making minimum payments on your credit card for a while, you may have recently received a letter from your credit card company asking you to increase your monthly payment, or suggesting you do so.

The Financial Conduct Authority (FCA) has stated that all customers who’ve been paying more in interest and charges than their balance for 18 months or more should try to increase their payments.

These guidelines originally only applied to credit cards, but has now been extended to include store cards and catalogue accounts.

Are you in control of your repayments? Click here for our 60-second repayment checker.

What's 'persistent debt'?

If you’ve received a letter telling you that have a ‘persistent debt’, you may feel a bit confused, especially if you don’t think you’re 'in debt' at the moment.

It’s considered 'persistent debt' when you pay more in interest and charges on your credit card than you’ve repaid of the amount borrowed. This is calculated based on your activity for the last 18 months. Having a 'persistent debt' could make it more likely that you get into difficulty with debt in the future.

Minimum payments tend to only cover the interest and charges on the debt, or at most a very small amount of the balance.

By paying more each month, you could reduce your credit card balance quicker and move your account out of persistent debt. You could also save yourself money because you'll pay less in interest.

We can help you deal with persistent debt, get in touch with our dedicated team


Why is my card provider writing to me about persistent debt?

The FCA has stated that your provider must tell you if your credit card falls under the definition of 'persistent debt'. They also have to:

  • Ask you if you can repay more of your debt each month
  • Make you aware of other repayment options
  • Warn you what could happen if you continue making low repayments

Your creditor isn't trying to force you to pay money you can't afford. Instead, they're acting on rules set out to protect you from a potential debt problem in the future.

You can also find in-depth information on how to deal with a persistent debt in our factsheet (PDF).

What if I don't increase my payments?

You can carry on making the minimum payments towards your credit card. This won’t cause your account to default, but credit card lenders are now obliged by the Financial Conduct Authority (FCA) to contact you regularly and suggest actions to take to increase payments.

If you're unable to do this, they’ll consider other options, such as reducing your card's interest rate. This may even involve suspending your account, which will impact your credit file.

In order to get customers out of persistent debt, some providers have chosen to increase the contractual minimum payment themselves. They do this by updating their terms and conditions on minimum payments. If your provider decides to do this, they should write to you to let you know.

After 18 months

You've repaid more in interest and charges than you have towards your balance over the past 18 months. At this point, your provider will contact you. They'll encourage you to take action so that by month 36 (i.e. 18 months' time), you no longer have the persistent debt.

After 27 months

You'll be contacted again by your provider if your account remains in persistent debt (in other words you have only made minimum payments). Once again they'll encourage you to take action.

After 36 months

If you still have a persistent debt on your account, your provider should offer you a way to pay this off within three to four years. They may suggest:

  • An affordable payment plan so you can clear the debt quicker or
  • Clearing the debt altogether by using another credit product, such as a loan or credit card



How likely is it that my credit card could be suspended?

While your provider would only suspend your card as a last resort, ignoring them or not making any attempt to increase your payments could make a suspension more likely.

If increasing your monthly payment isn't an option, they may suspend the card to prevent your balance getting any bigger.

How can I get my card out of persistent debt?

To help to repay more of the card's balance, you should do one of the following options:

Speak to your credit card provider

They may be willing to suspend interest and charges on your current card for a while. If you’re thinking of moving your persistent debt to a loan or card at another bank, let your current provider know. They as they may be able to offer you a better deal.

Stop spending on the card and increase your monthly payments

By doing this, you'll see your credit card balance reduce quicker. Use the UK Finance credit card calculator to work out how much more you’ll need to pay each month to clear your debt quicker [note: the calculator is not optimised for mobile phones].

Consider ways you could pay off this debt quicker

This can range from moving your persistent debt balance to a cheaper credit card, or reviewing your budget to see how much extra you could pay each month.

How much of a monthly payment covers my balance?

A monthly credit card payment includes:

  • An amount for interest and charges
  • An amount to reduce what you owe

When you only pay the minimum each month, the credit card debt takes a long time to reduce because your payment mainly goes towards your interest. Only a small portion of the payment goes towards the balance.

If you repay more each month, more of your money will go towards your balance and you'll pay off your debt quicker. Use the card costs calculator now to find out how much sooner you could pay off your persistent debt with increased payments. 

To find ways to pay your debt off quicker, read our persistent debt guide (PDF).

How long will it take to pay off my credit card?

The UK Finance calculator can tell you how long it would take you to pay off your credit card by only paying the minimum amount. It can also tell you how quickly you could pay it off by increasing your monthly payment.

For example, let's say you owe £2,796 on a credit card that you no longer use. Depending on how much you can pay on top of the monthly minimum payment, there'll be a drastic reduction in what you pay in total over time. persistent-debt-graphic-mobile-final(Note: these figures are based on estimates and will vary depending on your interest rate.)

How do I pay off my persistent debt?

By understanding your budget, you’ll know where you can cut back on spending. You can also start thinking about how much of the money you’ve saved can go towards getting you out of debt.

Please visit the budgeting section of our website. There you'll find a downloadable budgeting form  that you can print and use to put your own budget together. 

Once you understand your budget, you could then consider one of the following options to get you out of persistent debt:

  • Pay the same amount each month - Choose an affordable amount above your minimum payment and stick with it
  • Pay your minimum payment, plus a fixed amount each month  - Paying a few extra pounds every month can make a huge difference. The UK Finance calculator can help you work out a fixed monthly payment amount
  • Make one-off additional payments when you can afford them  - You’ll still need to ensure you pay at least the minimum payment every month to avoid breaching the terms and conditions of your card
  • We also have a helpful factsheet(PDF) with more ideas on how to save money and boost your income.

Budgeting tips from MoneyAware

By saving money and increasing your income, you'll find it easier to pay more than the minimum amount on your credit card debt each month. Our blog, MoneyAware, is full of tips to help you make savings on your household bills and living expenses, such as:                                                                                                              

Can you help me with my debts and budget?

Only being able to repay the minimum can be a sign that you’re struggling financially, and may benefit from free and confidential advice on your budget and debts.

We provide advice and solutions to thousands of people who are struggling to pay their debts. We can look at your whole situation and give you information on how best to deal with your debts.

If you're struggling with your credit card repayments, we can help

Please call our dedicated team of advisors on 0300 303 2517, Monday – Friday 9am - 5pm.

Looking for more budgeting and money-saving ideas?

Subscribe to our monthly email newsletter and you’ll get our best budget and money tips straight into your inbox.

60-second repayment checker

Answer 5 quick questions to find out.

It shouldn’t take more than a minute to get a clear picture of whether you're on top of your credit card, store card and catalogue repayments or not.

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Did you pay only the minimum payment last month?


Do you regularly pay only the minimum payment?


Have you had any letters warning you that you're in 'persistent debt'?


Do you ever miss payments to your credit card, store card or catalogue accounts?


Do you worry about not being able to keep up with repayments or not being in control of your credit?

You're in control

Based on your answers it sounds like you’re in control of your repayments.

Because you’re not missing any payments and you’re not just paying the minimum each month, you’re reducing your balance. You’re also saving money by not paying interest.

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Things are OK

Based on your answers, it sounds as though you’re mostly keeping on top of your repayments at the moment.

That’s great. By paying more than the minimum payment each month, you reduce your credit card balance quicker and you can also save yourself money because you’ll pay less in interest.

Find out more about what can happen if you’re only making minimum payments by clicking the button below.

Find out more

You could make some improvements

Based on your answers it looks as though you’re doing everything you can to keep on top of your repayments, but you might be able to make improvements.

If you depend on making the minimum payment each month, you’re at risk of your account being in ‘persistent debt’. Your creditors will contact you and ask you to pay more each month.

Find out more

Or you can contact our dedicated persistent debt team on 0300 303 2517. We’re available Monday to Friday 9am to 5pm.

And if you’ve missed any payments, you might be struggling to keep on top of your finances. Find out how we can help you.

You need debt help

Based on your answers, it looks like you’re struggling financially. We can help you out. We’d recommend you get in touch with us for free debt advice.

Use our online debt advice tool for tailored budgeting advice and a personal action plan.

Get debt help now

If you’d like to talk to a debt advisor, please call us on 0800 138 1111. We’re open Mon-Fri, 8am-8pm, Sat 8am-4pm.

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