How to get help with persistent credit card debt | moneyfacts.co.uk

Michelle Monck

Michelle Monck

Consumer Finance Expert
Published: 28/04/2020

At a glance

  • Credit card firms may suspend the cards of those in persistent debt for three years
  • Rules to suspend credit cards of those in persistent debt will not apply until 1 October 2020
  • Speak to your credit card lender if you receive a notification that you are in persistent debt

What are persistent debt rules?

The Financial Conduct Authority (FCA) introduced new rules in 2018 requiring credit card firms to help those struggling with continual credit card debt. The FCA defined this as those people who pay more in interest and charges over 18 months than they have paid off the amount borrowed. Those credit card borrowers who meet the definition will receive a notification from their credit card provider.

How do I know if I am in persistent debt?

Your credit card provider will write to you and let you know if you meet the requirement as set out by the FCA. Your lender must write to you and let you know that you are in persistent debt and encourage you to increase your monthly payments. This will help you to reduce the overall debt on your credit card. If you are unable to increase your payments, you should contact your credit card provider and let them know about your situation.
If you have made no payment changes or not spoken to your credit card provider, then you will receive another reminder in nine months after your initial notification.

Act within three years or risk losing your credit card

You have 18 months from your first notification to increase your credit card payments or to confirm with your credit card lender why this is not a viable option. If you do not act, then your credit card provider will write to you again with a repayment plan that will pay off your debt over a period of years. At this point, you either need to agree to the repayment plan or contact your lender informing them why you are unable to pay more. If you ignore the notifications from your credit card provider, then you may have your credit card suspended.

Moneyfacts tip

Moneyfacts tip Michelle Monck

Our guide, how to manage your personal debt, has more help and suggestions if you are worried about how much debt you have.

What should I do if I receive a persistent debt notification?

If you receive a notification that you are in persistent debt, you should contact your credit card provider immediately and update them about your debt situation. Continue to make at least your minimum monthly repayment, otherwise you risk a default being recorded on your credit file.
Credit card providers cannot make you pay more than the minimum monthly amount, they can only suggest a repayment plan. A repayment plan for a specific credit card may not be the right approach to address your overall debt problem. For example, you may have more than one credit card and other forms of debt that is costing you more money. You need to share this information and approach to managing your debt with your credit card company.

Transfer to a 0% balance transfer credit card

You could consider transferring to a 0% balance transfer credit card. You can also get help managing your debt in our guide 12 steps to get debt free.

When are the new rules coming into force?

The persistent debt rules started in 2018, with 2020 due to see the first cardholders receiving their third notification and potentially having their cards suspended. Due to Coronavirus, credit card firms and the FCA have agreed no one will have their credit card suspended until at least 1 October.

Why are credit card providers suspending cards?

Credit card companies will only suspend your card if you ignore their notifications that you are in persistent debt. The FCA’s persistent debt rules mandate credit card companies to take some form of action if cardholders remain in persistent debt for three years and have not addressed or discussed this with their credit card provider. The ultimate action they can take is to suspend your credit card to help ensure you cannot get into any further debt.

Find out more about credit card interest

Want to talk to someone about your debt problem?

You should look for a non-profit debt counselling service such as Citizens Advice, StepChange or National Debtline.

Disclaimer: This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.

man holding blue bank card

At a glance

  • Credit card firms may suspend the cards of those in persistent debt for three years
  • Rules to suspend credit cards of those in persistent debt will not apply until 1 October 2020
  • Speak to your credit card lender if you receive a notification that you are in persistent debt

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