Persistent Debt

What is persistent debt?

Persistent debt is where, over 18 months, you’re paying more in interest, fees and charges than you’re paying off the amount you’ve borrowed with your credit card. This is an expensive way to borrow money.

This means, without increasing your payments, it could take several years and cost you more in interest and charges before you’ll repay your balance.

We’ll get in touch to let you know if you’re in persistent debt and give you practical advice to help you.

Why do I need to take action?

By taking action, you could greatly reduce the amount you are paying in interest and clear your debt quicker.

Your minimum payment is set at a low level to give you the flexibility to pay low amounts for a short time. It’s not a good idea to pay low amounts for a long time as this will mean you pay more in interest and it will take you a long time to pay off your balance

How do I get out of persistent debt?

We would urge you to increase your repayments, if you can. We have various repayment options available to assist you:

• Direct Debit

Set up a direct debit or increase your current direct debit repayment percentage. For example, if you increase your monthly payments from the minimum monthly repayment of 3% to 10% you would clear your outstanding balance within a shorter period and you would come out of persistent debt.

You can find the direct debit form here

• Online, Mobile or Phoneline Banking

You can make manual payments to your credit card on our Online, Mobile and Phoneline banking services, if already set up to do so.

• Clear your outstanding balance

It may be better for you to close your credit card account and clear your outstanding balance with a loan with set repayments that will cost you less over time.

Other options:

• Stop using your card for a while – this will stop your debt increasing while you get back on track. We can help with this by putting a temporary block on the card.
• Have your limit reduced - we can also reduce your limit which will stop your debt increasing.

If you can’t afford to increase your payments, contact us and we will work with you to find a more suitable repayment option.

What happens if you don’t take action

If the payments you make are not enough to change your situation after we first contact you to tell you that you're in persistent debt, we will contact you again.

We will initially contact you when you are in persistent debt for 18 months. We will review your account again at 27 months and if you're still in persistent debt, we will write to you. After 36 months, we will be in touch again.

We'll offer ways for you to repay quicker, over a reasonable period. Taking action to reduce your debt is important. If you do not take action, we may have to suspend your credit card, which could impact your ability to obtain credit facilities in the future.