Don't worry, you haven't done anything wrong. As long as you've been paying the minimum amount due, this is in line with what's required under your credit agreement.
The Financial Conduct Authority (FCA) introduced rules with the aim of helping customers avoid borrowing money for too long, on credit accounts (credit cards, store cards etc).
If you've been making the requested minimum payment or close to this over the past 18 months, it’s likely you’ll have paid more in interest, fees and charges than the original cost of your purchases. Under the FCA rules, this means your account is in 'Persistent Debt'.
How will I know if my account is in Persistent Debt?
We'll write to you if your account is in Persistent Debt and let you know how you can clear your balance quicker, and pay less overall.
What do I need to do?
It's important that you continue to make at least the requested minimum payment on your statement, so your account stays up to date. However if you’re able to do so, we encourage you to pay even a little more than your minimum payment as this will help towards reducing the amount of interest charged and clear your balance quicker.
Here’s an example to show how increasing your regular payment will reduce the amount of time it takes to pay off your balance:
If you’d like to see how paying a little more can reduce the time it will take to pay off your balance and how much interest you could save, you can use our Repayment Calculator.
How much do I increase my payments by?
There’s no specific amount to increase your payments by – this is entirely your choice based on what you can afford. If you’re able to pay a little extra, that’s great! You should always try to pay more than your minimum payment as and when you can, as this will save you money in the long-term.
How can I increase my payments?
After you've worked out a repayment amount affordable for you, you can increase your payments by:
- Setting up or changing your Direct Debit to a higher regular amount
- Paying a higher regular amount using your normal payment method
- Making extra payments as and when you can by logging into your online account, or contacting us
What happens if I continue paying the minimum payment / can’t afford to pay more than my minimum payment?
We understand that you may not be able to pay more right now, don’t worry – we’ll keep an eye on your account and we may contact you again down the line if your account remains in Persistent Debt.
In the meantime, it’s important you keep your account up to date and avoid further charges by continuing to make the requested minimum payments. If your circumstances change in the future, remember making even a slight increase to your regular payment can make a difference.
If you need some help budgeting, there are budget tools available.
Can I continue to use my credit facility?
Yes. Unless we've contacted you to advise otherwise, you can continue to shop with us and use your credit facility.
As mentioned above, we'll continue to review your account, and if your position remains unchanged over the 18 months after we first notified you that your account was in Persistent Debt, we may have to suspend your credit facility which will mean you won’t be able to shop on your credit account.
Will my credit score be affected?
No, there is no direct link between Persistent Debt and your credit score, providing you keep your account up to date by paying at least the requested minimum amount due by the payment date shown on your statement.
Help and support
Independent financial help: