What is persistent debt?

Persistent debt means you've paid more in interest, fees and charges than you actually owe over the last 18 months or longer.

The Financial Conduct Authority (FCA), which oversees lending rules, has asked lenders to spot and offer support to customers in persistent debt.

If you receive a letter about persistent debt, don’t worry, they’re just following rules to help you avoid getting into more debt.

When you make a credit card payment, part of it goes towards interest and charges, while the rest reduces your actual balance. 

If you only pay the minimum, most of your payment covers interest, with only a small portion chipping away at your debt. This is why persistent debt can take a long time to clear.

Paying more than the minimum helps you clear your debt faster.

The time it takes depends on how much extra you can pay and your interest rate.

If your account is in ongoing debt, your lender has to:

• bring it to your attention
• ask if you can pay more each month to clear your debt quicker
• tell you about other repayment options
• warn you about the risks of sticking with low payments

Will my credit card be suspended?

If you have ongoing debt for over 36 months, your lender might stop you from using your card. 

This is called ‘suspension’ and usually happens if you ignore their messages or don’t try to pay more.

They might also suspend your card to stop your balance from getting bigger if you can’t make payments.

Can a suspended credit card be reinstated?

Credit card suspensions can be temporary. 

Whether your lender is prepared to reactivate your card depends on your issuer's policies and the reasons for the suspension. 

It's a good idea to contact your lender to confirm why your card was suspended and what you can do to reactivate it.

If you want to tackle your persistent debt, try the following steps:

Talk to your provider

Contact your lender and explain your situation. They might be able to help by:

• stopping interest and charges
• offering a more suitable repayment plan
• discussing options if you're thinking about moving your debt to a loan or another credit card

Stop spending and increase payments

To pay off your debt faster:

• stop using your credit card 
• increase your monthly payments as much as you can
• make extra payments where possible, however small (it all adds up)
• always pay at least the monthly minimum to avoid extra fees

Explore other repayment options

Look into transferring your balance to a cheaper credit card or reviewing your budget to find extra cash for repayments.

Our free online budgeting tool can help you see where you can cut back and save.

If you can only afford the minimum monthly payments on your credit card, you may benefit from getting help.

We offer free, confidential debt advice to help you get back on your feet. All of our advice is free and impartial. Some debt solutions are also free, for others there’s a fee.

Don't let persistent debt weigh you down. By taking control of the situation, talking to your lender and making a plan, you can regain control of your money and work towards a brighter financial future.