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
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.
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.
Being in persistent debt doesn't automatically create a negative mark on your credit report. But the knock-on effects can still cause problems:
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.
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.
Don't ignore it. Here's what to do:
There are a few options you could consider, depending on your situation:
If you're worried about persistent credit card debt, free advice is available from the below organisations:
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