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Derin Clark

Derin Clark

Online Reporter
Published: 03/06/2019

Credit card borrowers considered to be in persistent debt are currently receiving letters to take action to repay their debt or they could be required to enter into repayment plans and may have their cards suspended.

People who are considered to be in persistent debt are those who have reached 27 months of paying more in interest and charges than they have paid off from their balance. Consumers who receive a letter to take action are being urged to act now as, if they continue to be in persistent debt after 36 months, from March 2020 they will be required to enter into a repayment plan with their card provider and may have their card suspended. The repayment plan could mean borrowers are forced to make higher payments each month, which debt charity StepChange warns could result in people reaching a cliff edge moment when they struggle to make repayments.

This move towards enforcing credit card repayments comes as part of new credit card rules introduced by the Financial Conduct Authority (FCA) in February last year. At the time of the rules being introduced, the FCA estimated that four million accounts are in persistent debt and providers have few incentives to help these customers because they are profitable. The regulator introduced the new rules to try and combat the amount of persistent debt in the UK, however StepChange believes not many in persistent debt have taken action to reduce the amount they owe.  

Phil Andrew, StepChange Debt Charity CEO, said:

“The regulator’s approach to how credit card providers should address longstanding credit card debt initially relies on getting them to encourage people to increase their payments voluntarily. We don’t know how many people have increased their credit card payments as a result of the communications they’ve received, but our sense is that not many have. This begs the question about whether that’s because they haven’t realised the importance of doing so, haven’t noticed their firm’s communications, or simply can’t afford to pay more. We think the regulator should try to find out.

“Our own persistent debt pilot service hasn’t dealt with enough people to give a reliable understanding of the landscape, but has certainly given us worrying cause for concern about the risk of people hitting the buffers hard at 36 months, when actions become compulsory. At this point, there may be significant numbers of people with ‘hidden’ problem debt who are coping on a minimum payment basis but could tip over into difficulty once higher payments are required, and may need help and forbearance at that point.”

Debt help

For those who are in persistent debt or struggling to pay back more than the minimum amount on their credit card debt, there are a number of places to go for help including StepChange, Citizen Advice and Money Advice Service.


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