If you've only been making small repayments on your Credit Card or Storecard over the last 18 months you may have paid more in interest, fees or charges than towards paying off the amount you've borrowed on the Card. Under new rules, issued by the Financial Conduct Authority (FCA), this means that your account may be classed as being in 'Persistent Debt'. Our aim is to help you avoid long term debt and keep money in your pocket.
If your account is showing as being in Persistent Debt you may have received a letter from us, advising you that increasing your monthly payments would help you reduce your debt, which would reduce the amount of interest you would pay and cut the overall time it takes you to pay back your balance. We'll continue to review your account, over the next 18 months, to see how you're doing with trying to pay more off each month.
By paying a bit more each month over a regular period, you may actually save money in the long run by reducing interest payments and pay off your balance soner. You can use the repayment calculator below to work out the montly amount that ultimately helps to bring your account out of Peristent Debt.
If you're worried about your financial situation please contact us on 0371 376 9214* to speak to our Customer Support Team. You could also contact one of the organisations at the bottom of this page that offer free confidential support and advice.
If you've received a letter from us asking you to think about making your recommended payments to keep your account open, please note that this isn't your contractual payment. Your minimum payment stays the same.
The recommended payment is higher than your minimum payment, but it will make sure that you're always paying more than your interest, fees and charges. This means you're paying down your Persistent Debt balance and you'll see 'Recommended Payment' showing on your monthly statements. By sticking to these payments, you'll be repaying your Persistent Debt balance over a period of 4 years.
Please note that we're also required to ensure that any new spending on your Credit Card or Storecard also doesn't enter Persistent Debt, so your recommended amount will change depending on your spending activity.
Under your current contractual terms you're allowed to continue making only your minimum payment, so don't worry if that's what you want to do. Unfortunately however, due to these new regulations - and to prevent you from incurring further debt - we would be required to suspend the use of your card. You'll still need to repay your balance in full, but this could take considerably longer than 4 years, and once your balance has been paid off, your card will not be reinstated.
If you'd like to know more about how your payments impact the time taken to repay in full, then please use the repayment calculator below which will help you understand how long it would take you to repay based on your current payments.
Click here to find out ways you can make a payment to your card account.
Check balances, view statements online or set up a new direct Debit payment in your Online Account Manager.
To discuss your account, please contact us on 0371 376 9214
New rules issued by the Financial Conduct Authority (FCA) aim to help Credit Card and Storecard customers avoid long term debt. You've been making small repayments over the last 18 months or longer which means you may have paid more in interest, fees and charges on your Credit Card or Storecard than towards paying back what you initially borrowed. Your account is therefore in Persistent Debt.
If you have been making minimum payments as per your Credit Card and / or Storecard agreement, you have not done anything wrong. Following the new rules introduced by the Financial Conduct Authority (FCA), we are required to let customers know when their account is or showing signs of being in Persistent Debt, the impact of this, what could happen to their card and how their situation can be improved.
These rules were created by the organisation that regulates the Financial Services Industry, the Financial Conduct Authority (FCA).
Increasing your monthly repayments will ultimately help you save money as you will pay less in interest, fees and charges. You will also reduce the balance you owe more quickly and help you reduce your debt. Finally, you will eliminate the risk of your card being suspended and credit score affected if you are unable to repay the debt over a specified timescale.
It's always advisable to carefully consider how much you can afford. Paying just a little bit more each month, or making a one off payment can make a positive difference. To calculate how long it will take you to pay off what you owe and how much interest you can save, you can use our Repayment Calculator above.
As a responsible lender we are committed to helping our customers make informed decisions. If you can't increase your monthly payments or have concerns about your level of borrowing you may want to speak to our Customer Support Team to discuss your spending and repayment situation. We're also advising you that if you don't increase your monthly payments, we may act further by suspending your card to protect you from further debt, which may have an adverse impact on your credit record.
Making just the minimum payments can affect your credit score over time. Your payment behaviour, for example if you fail to make payments can help other lenders decide whether to lend money to you or not. However, there's no direct link between your credit score and your account being in Persistent Debt.
No, we aren't asking you to pay off your balance straightaway. You just need to pay more of the amount you've borrowed compared to the amount of interest, fees and charges incurred. You could also set up a Direct Debit for an amount above your minimum payment or a text alert to help you manage any spending.
Our Customer Support Team may be able to help you look at your spending and repayment situation. Alternatively you may wish to contact one of the organisations below who offer free and confidential support and advice. If you need help budgeting, there are free tools available online, for example at www.moneyadvice.co.uk
Website: adviceuk.org.uk
Telephone: 0300 777 0107
Website: nationaldebtline.org
Telephone: 0800 808 4000
Website: ukfinance.org.uk
Telephone: 0207 216 8800
Website: payplan.com
Telephone: 0800 280 2816
Website: citizensadvice.org.uk
Website: moneyadvicetrust.org
Website: cas.org.uk
Telephone: 0131 550 1000
Website: stepchange.org
Telephone: 0800 138 1111
Website: moneyadvicescotland.org.uk
Telephone: 0141 572 0237
