What is persistent debt and how do you get out of it?
If your credit card balance never seems to shrink no matter how much you pay, there's a name for it — and rules in place to protect you. This guide explains what persistent debt is and how to deal with it.
5 min read
What is persistent debt?
Persistent debt is when, over an 18-month period, you pay more in interest, fees, and charges on a credit card than you pay towards the balance itself. Your debt isn't getting smaller — you're just paying to stay in the same place.
The FCA (Financial Conduct Authority) introduced persistent debt rules to protect people in this situation. Under these rules, credit card companies must contact you and offer help if you stay in persistent debt for too long.
What happens if you're in persistent debt?
Your credit card company will contact you in stages:
|
Stage |
When it happens |
What your lender does |
|
Stage 1 |
After 18 months |
Contacts you with suggestions to pay more to clear the debt over a reasonable timeframe |
|
Stage 2 |
After 27 months |
Contacts you again with stronger advice to increase payments |
|
Stage 3 |
After 36 months |
Must set out options for you to clear the balance, which could include a repayment plan |
It’s important to take these letters seriously. Ignoring them can limit your options further down the line.
If you don't respond or can't keep up with any options to clear the balance provided to you at stage 3, your lender may suspend or cancel your card.
Does persistent debt affect your credit score?
Being in persistent debt doesn't automatically create a negative mark on your credit report. But the knock-on effects can still cause problems:
- If your card is suspended, your available credit falls — and that can impact your credit score
- A repayment plan or missed payments may be recorded on your credit report
- A lower credit limit can push up your credit utilisation ratio, which can affect how lenders assess future applications
Persistent debt itself isn't a black mark, but leaving it unaddressed can be. Acting early is the best way to protect your credit report.
How long does persistent debt last?
Persistent debt isn't a fixed period - it depends on your payments in the last 18 months. This means your status can change before reaching the 36-month mark.
Here's how it works: Your credit card company looks at a rolling 18-month window. If you've paid more towards your interest and charges than your actual balance during that time, you're in persistent debt.
But if you start paying more off your balance than you're charged in interest and fees, you can move out of persistent debt before hitting 36 months. The reset isn't tied to a set date - it's based on your payment pattern in the preceding 18 months.
This means taking action early really pays off. If you increase your payments now, you could exit persistent debt status sooner rather than waiting for stronger measures to kick in.
What to do if you get a persistent debt letter
Don't ignore it. Here's what to do:
- Check which stage the letter refers to
- Look at your current monthly payment and whether you can increase it
- Contact your lender if you're struggling — it is required to help
- Get free debt advice from a service like StepChange if you're unsure what to do next
How to get out of persistent debt
There are a few options you could consider, depending on your situation:
- Pay more each month: Even a small increase can help — once you're paying more towards the balance than you're being charged in interest, you're out of persistent debt territory.
- Switch to a 0% balance transfer card: If your credit score allows it, moving your balance to a 0% interest card means every payment goes towards clearing what you owe.
- Consider debt consolidation: A consolidation loan can combine your credit card debt, along with other debts, into a single monthly payment, often at a lower interest rate. This may reduce how much you pay each month and make your debt easier to track – however, extending the term of your borrowing may mean paying more in interest overall.
- Get free debt advice: Services like Citizens Advice and StepChange can look at your full financial picture and point you towards the right option, whether that's a repayment plan, a formal debt solution, or a simple change to how you're managing your money.
Where to find persistent debt help
If you're worried about persistent credit card debt, free advice is available from the below organisations:
- Citizens Advice — 0800 240 4420
- MoneyHelper — 0800 011 3797
- National Debtline — 0808 808 4000
- StepChange — 0800 138 1111
Disclaimer: We make every effort to ensure content is correct when published. Information on this website doesn't constitute financial advice, and we aren't responsible for the content of any external sites.
