What is persistent debt?

Persistent debt is when you pay more in interest, fees and charges on your credit card, than you have repaid of the amount you have borrowed for a sustained period.

It's an expensive way to borrow money and will take you longer to repay your debt.

Example:

Here’s how, by changing payment behaviour, you could pay off debt quickly and more cheaply…

Zoe's credit card balance is £3,000 and her interest rate is 17.9%. Her minimum payment this month is £71.45, with only £30 of it actually reducing her balance, and the remaining £41.45 covering the interest. This means she's paying more in interest and charges than repaying her balance.

If Zoe were to increase her monthly payment to £100, she’d pay £58.55 off her balance and £41.45 in interest. If she continued paying the £100 each month, she’d pay £2,325 less in interest, and clear her debt 10 years and 8 months quicker than if she only made the minimum repayment each month.

How we'll contact you about persistent debt

The Financial Conduct Authority (FCA) has introduced rules to help people in persistent debt. As a responsible lender, we'll contact you to let you know that you're in persistent debt and provide options to help you get out of it.

After 18 months: voluntary payment amount offered

We'll get in touch once you've been in persistent debt for 18 months to let you know that you're in it.

We'll also start providing you with a voluntary payment amount each month, by letter or email. Paying this amount will take you out of persistent debt.

After 27 months: account review

We'll review your account again at 27 months. We'll write to you to let you know if you're still in persistent debt or not.

After 36 months: further support options offered

If you're still in persistent debt after 36 months, we'll provide you with options to support you in paying off your balance sooner, such as moving on to a fixed term pay down plan.

After 39 months: card suspended

We'll review your account again at 39 months.

We may suspend your card if you're still in persistent debt after 39 months. This is to prevent you from adding more to your balance, which could cost you more and means it takes you longer to pay off your debt.

Once you've paid off your debt, we’ll close your account.

You can apply for a new card with us if you would like. However, you won't be eligible for any introductory offers if you've had an account in the past 12 months.

If you move out of persistent debt before month 39, your card won't be suspended, and your account will remain open. We’ll write to you to let you know you're out of persistent debt and provide you with tips on how to avoid slipping back into it.


How to get out of persistent debt

To get out of persistent debt, you need to pay off more of your balance each month than you pay in interest, fees and charges. There’s more than one way to do this and the best way for you will depend on your situation.

1. Make additional payments

You can make additional payments to your credit card at any time. So, if you find yourself with a little cash to spare, why not use it to reduce your credit card balance? Additional payments will help you move out of persistent debt and bring down your balance faster.

How to make additional payments

2. You may wish to consider using your savings to bring down your balance

If you have savings, and don't need the money for something else, you could use these to reduce your credit card balance.

You'll be paying more in interest on your outstanding balance than you'll be earning on your savings. So, bringing down your balance will save you money in the long run.

Please make sure to check that there aren't any charges or impacts to your interest rate before you take out your savings.

3. Pay a fixed amount each month instead of the minimum payment

If you don't plan to spend any more on your card, think about changing to a fixed payment. It doesn't have to make a big difference to your monthly outgoings and could save you a lot.

If you can't view the whole table, swipe or scroll to show more > > >

Persistent debt ways of paying.
For a card with a balance of £3,000 and an interest rate of 17.9% If you make your minimum payment If you make a fixed payment If you make a bigger fixed payment
Monthly payment Starts at £72, and reduces each month as the balance decreases Fixed at £72 every month £100
Time to pay off your balance 14 years and 1 month 5 years and 3 months 3 years and 4 months
How much you’ll pay in interest £3,227 £1,499 £901
How much money you’ll save n/a £1,728 £2,326

To work out the right numbers for your card, try cardcosts.org.uk (opens in a new window). It's a free calculator which can help you work out how much to pay. You'll need to know your card's minimum payment rules to use it.

It's best to pay off as much as you can afford. If you'd like some help budgeting, we're happy to help.

Visit us in your nearest branch.

Phone

Monday to Saturday, 8am to 8pm.

Sundays and bank holidays, 9am to 5pm.

Our automated helpline is available out of hours.


How to make payments to your card

If you bank with us, it's easy to make a payment to your credit card in our Banking app or Internet Bank. Just select your current account and make a transfer to your credit card.

If you bank with another provider, you'll need these details to make a transfer:

  • Sort code: 07-30-12
  • Account number: 00001604, and
  • The 16-digit number on the front of your credit card (to use as your reference)

If you pay by direct debit, you can increase your payment in the Internet Bank or by giving us a call. You can also call us to set up a new direct debit.


What to do if you're worried about persistent debt

We understand that it's not always easy to just pay a bit more. If you have any concerns then please get in touch with us.

Phone

Monday to Saturday, 8am to 8pm.

Sundays and bank holidays, 9am to 5pm.

Our automated helpline is available out of hours.

If you'd prefer some advice from an independent organisation, try these free services: