If you’ve been contacted by your lender with a ‘persistent debt’ notice, this means over an 18-month period you’ve paid more in interest, fees and charges than you have repaid on your credit card balance.  

Your lender, dutifully, will contact you in writing, by letter or email, and encourage you to raise the amount you’re repaying monthly, so your balance starts to go down faster. Or they will urge you to talk to them as to why you are unable to increase your monthly payments.

These notices are a result of rules introduced by the FCA who want to help firms help their customers to reduce the level of debt on their credit and store cards and be well advised on paying less in interest, over a long period of time.

What you can do about your Persistent Debt

Firstly, there’s no need to worry. Here are some suggestions to overcome persistent debt, one of these may be the right solution for you, however, there is time to decide during the communication process that your provider will go through with you. 

Continuing to pay the minimum if you simply can’t afford to increase your monthly payments straightaway, as your lender will urge you to do, then that’s ok, especially if you’ve just been contacted for the first time.  

Making the suggestion of repaying more each month is fine, but for those with more than one debt product, they all need to be considered.  The best strategy in this scenario is to list them all, credit cards, store cards, overdrafts, etc, and if you can afford to pay a little more each month, pay more towards the one with the highest interest rate. Focus on clearing this one first.  

Whatever your situation though, the ideal is to contact your provider after the first notice and explain your situation – they may be able to help you clear your debt sooner if you ask.

Speak to your credit card provider – while the easiest thing to do after a persistent debt notice is to increase your monthly payment – and then you will be left alone – this may not be an option right now.  If you explain your situation to your lender, they may be willing to help you find a repayment plan you can afford by suspending or reducing interest and charges on your current card for a while. Just bringing down your interest rate will allow you to be debt-free quicker – saving you years of interest.  However, it may mean you cannot use your card to add more debt to, so check all the details with your lender before agreeing to new terms.  

Transfer to a lower or 0%*rate credit card – transfer your credit card balance (or debt on multiple cards) to a card that charges a lower rate of interest or one that offers an *introductory 0% interest rate.  If you’re eligible, this could save you hundreds or thousands of pounds in interest on your existing debt.

ALSO READ How to transfer to a lower rate credit card or 0% balance transfer

Consider ways you could pay off your debts more manageably – if you have several credit product debts, maybe multiple credit/store cards and/or an expensive overdraft, consolidating them and seeing if you can get a bank loan could be a good option for becoming debt free at a lower interest rate. 

ALSO READ Should you consolidate your debts into a personal loan?

If consumers are concerned about persistent credit card debt and/or have multiple credit cards they are dealing with, they can find information about free debt advice from National Debt Helpline, StepChange, or Citizens Advice

NOTE: The Financial Conduct Authority (FCA) has introduced rules that mean providers must grant a minimum three-month repayment freeze to anyone struggling to pay their credit card debts due to the coronavirus pandemic.