Skip main navigation

I can’t afford my credit cards – what will happen?

If you find yourself unable to afford your credit card repayments, contact your lender straight away, as you may be able to work out a different payment plan.

Not paying your credit card bill can result in fees and charges - and missed payments will show on your credit report for 6 years. Missing multiple repayments can lead to your account defaulting and even a CCJ (County Court Judgement), which will knock your credit score significantly.

6 min read
Cant pay credit card

What to do if you can’t pay credit card debt

Whilst your credit card debt may seem overwhelming and unmanageable, every situation has a solution. If you’re in a position where you feel you can’t afford to pay off your credit card, there are four steps you should explore:

1. Calculate what you owe

The first stage is to calculate exactly what you owe including the interest. Write down the amounts owed on each credit account you have, alongside the interest rate and the minimum monthly payment, so you can figure out the total cost.

It’s a good idea to find out about credit card charges if you’re unsure what you are paying.

From this, you’ll be able to work out the figure you need to meet all repayments - this is the total of all your minimum monthly payments. You will also be able to calculate the cost of the debt each year or month, which is handy for motivating you to clear it.

If you can meet these minimum payments by cutting out other non-essential expenses and then look to increase your payments as soon as your budgets allow to ensure that you get out of debt.

2. Prioritise high-interest debt

Once you’ve figured out your minimum payment total each month, can you increase that slightly? For example, if you’re paying £100 per month on your cards and you can afford an extra £20, allocate that to the highest interest account. Doing so will save you the most money in the long run.

It’s also important that if you have other priority debts, these take precedence. This includes council tax, rent or unpaid income tax, and are generally considered a higher priority because of the consequences of not paying (see a full guide on priority debts on Citizens Advice).

3. Look into alternative lending

If your cards are costing you too much, it might be cheaper to transfer the debt elsewhere. You could look to transfer the credit to an account with a better APR to lessen your payments. Some credit card companies offer low or no interest on balance transfers for an introductory period, but remember that there is often a fee when you initially transfer the balance.

Many lenders and comparison sites offer eligibility checkers, to see how likely you are to be accepted for a product. This can take just 60 seconds for a decision, so you can see if you’re eligible for a specific card straight away - without impacting your credit score.

Equally, if you have a number of debts with a high-interest rate you may want to consider a debt consolidation loan, which may leave you with a cheaper and more manageable monthly payment, but you need to be sure you won’t be tempted to rack up more debt by spending on your credit cards again. It’s also worth remembering that while it should be easier to manage, you could end up paying more interest and over a longer period of time.

4. Speak to your lender

“Lenders will deal with this on a regular basis, so they will want to help fix the situation for you and will often look at a different repayment plan to keep you on track.”

This can be via freezing payments and/or interest amounts or lowering the minimum repayment, which can help you get the breathing space you need to get back on track financially.

Again, set up a priority system for this, so focus on either the debts with the highest interest or the ones you owe the most too. You are looking to make your payments more manageable and within your budget constraints, so it may require you speaking to more than one of the people you owe money to.

5. Get free professional advice

There’s a lot of free and impartial debt advice you can get around the issue, from charities such as the Money Advice Service, Citizens Advice Bureau, StepChange and the Debt Advice Foundation. They will be able to help you create a plan for getting yourself out of debt and into a better financial situation, and can provide advice on speaking to your credit card providers or communicate with them on your behalf.

I’ve lost my job and can’t pay credit card bills

If you've lost your job and can’t meet your credit card repayments, there may be other options for you. What was an easily manageable payment may seem really difficult now you don’t have a regular income, but it’s a situation you can recover from.

The first thing to do is see if you can make an insurance claim. If you have taken out any mortgage payment protection insurance (MPPI), payment protection insurance (PPI) or short-term income protection (STIP) insurance, then they may be able to deal with your debt for you.

If you don’t have an insurance policy, don’t worry too much straight away. The change in your situation could help lenders be more sympathetic and more open to helping you out in the short term until you find new employment. Debt charities - again Citizens Advice, StepChange and the Debt Advice Foundation are great starting points - will have specific plans to help you out.

Speak to these experts straight away, as they will help you put your mind at rest and help you focus on the most important thing; getting a new job and keeping your finances on track.

I’ve had a letter about persistent debt

You may also have had a letter and/or email telling you that you are in persistent debt. This is a procedure credit card providers are required to follow with the introduction of new rules by the Financial Conduct Authority (FCA) to help millions of people get out of expensive, longer-term credit card debt.

These letters are sent out when you’ve been paying more on fees, charges and interest than on the money you owe, for an 18-month period. If you receive this letter it’s then good to look at your debts and figure out a plan to reduce them. Boosting your payments is the way to leave persistent debt. If you can’t afford to pay more, contact your lenders to discussion your situation or get free professional advice as mentioned above.