If you're struggling with credit card debt
There are things you can do to clear your debt. Every debt problem can be managed if you make a plan and stick to it.
If you have other debts that have a serious consequence like being evicted or getting a court fine, deal with them first. They’re called ‘priority debts’. You can use our tool to check if you have any priority debts.
Don't buy anything more on your credit card if you can avoid it - this will mean you can clear the debt sooner.
If you need help you can talk to an adviser. They can help you understand your options if you can’t afford your credit card payments. You don't need to pay a debt management company to help you.
If someone else has run up the debt, you'll be responsible for paying it if your name is on the agreement - for example if they have a second card for your account.
If you had a ‘coronavirus payment deferral’
Your credit card provider should not have added any interest to your account during your deferral period.
You should have also been offered a ‘repayment plan’ when your payment deferral ended. Your credit card provider must have been reasonable when they suggested what you should pay.
If you don’t think your credit card provider was reasonable, contact them. You can find their contact details on any letter they’ve sent you.
You should explain what you think is reasonable for you to pay.
If they don’t agree to a lower repayment plan, you can complain to the Financial Ombudsman.
If you’ve had a letter about the debt
Don't ignore the letter - it’s best to take action quickly to stop the situation getting worse. You can talk to an adviser to get help working out what to do.
If you’ve had a letter about taking you to court or making a claim, find out how to deal with a court claim.
If you’ve already been to court and your letter says a bailiff might visit, find out how you can stop the bailiffs coming.
You've had a letter about ‘persistent debt’
You might get a letter from your credit card company saying you're in persistent debt if you've:
- been paying off a debt on your card for 18 months or more
- paid more in interest and charges than the amount of debt you've paid off
They'll write to you after you've had the debt for 18 months, 27 months and 36 months.
In the letter, the credit card company will suggest how you could pay off your debt sooner. It’s a good idea to pay this if you can, but you don't have to pay more than the minimum payment if you can't afford it.
The company might also offer to help you in other ways, like reducing the interest or charges you’re paying.
If you've had the debt for 36 months, they’ll offer you a ‘repayment plan’. The plan will usually explain how you can pay off your debt in 4 years. If you don't agree to the plan, they’ll stop your card.
Work out what you can afford to pay - you shouldn't agree to the plan if you can't afford it or you're struggling with other debts.
If you can't pay what the letter suggests, contact the company and tell them how much you can pay. You should also ask them to stop charging you interest or fees if they haven't already.
The company has to be reasonable when they suggest what you should pay and how else they’ll help you. If you don’t think they’re being reasonable, contact them and explain what you think they should change. If they still don’t agree, you can complain to the Financial Ombudsman.
Work out what you can afford to pay
You should usually try to pay at least the minimum payment if you can. If you don’t, the company will charge a fee and your credit rating might get worse.
You should still pay essential household bills like rent, and any priority debts you have - even if it means you can’t afford the minimum card payment. It's more important to stay in your home or avoid court action. You can ask your nearest Citizens Advice to help you work out how to pay off your credit card.
Try to pay the same amount each month - it’s easier to plan how much money you'll have left for other things. You'll also pay off the debt sooner than if you just pay the minimum payment. This is because the minimum payment is a percentage of the debt that’s left on the card - so the minimum payment gets smaller as you pay off the debt.
If you can't afford the same amount each month, try to pay a bit more than the minimum if you can. This means you’ll clear the debt sooner and pay less interest overall.
James owes £3,000 on a credit card that charges 19% interest. He’s not spending any more on the card.
James’s minimum payment is 2.5% of the total debt. This starts at £75 for the first month and reduces as he pays off more of the debt.
If James just pays the minimum payment each month, he should pay off the whole debt after 26 years and 9 months. He’d pay £4,035 interest as well as the £3,000 debt.
If James pays £75 each month rather than letting the minimum payments reduce, he’d pay off the debt in 5 years and 1 month. He’d pay £1,539 interest.
If James pays £108 each month, he’d pay off the debt in 3 years. He’d pay £878 interest.
If you have more than 1 card
Pay the minimum payments for each card if you can. If you can afford to pay more, use it to pay off the card that costs most.
If you can't afford the minimum payment
Your credit card company might let you pause your card payments if you can’t afford them because of a temporary problem - for example if you’ve lost your job or you’re paying off priority debts like rent arrears.
If you're struggling with the cost of living, let your credit card company know. They should agree a 'repayment' plan with you - this means making payments you can afford over a fixed period of time.
You’ll need to start paying again when you have more money - for example when you’ve got a new job or cleared your priority debts. The card company are more likely to let you pause your payments if you get advice and make a plan to deal with your debts. Ask your nearest Citizens Advice to help you make a plan for your debts.
If you can't afford the minimum payment in the long term as well as paying household bills like rent, find out the best way to deal with your debt.
If you can only afford the minimum payment
If you'll be able to increase your payments in a few months, keep paying the minimum amount for now. For example, you might have more money if you’re about to start a new job or you’ve nearly paid a priority debt.
If you'll only be able to afford the minimum payment in the long term, find out if you can get a different deal so you pay less interest.
You might be able to:
- move the debt to another card that charges less interest - called a ‘balance transfer’
- get a loan that charges less interest than your credit card
If you get a loan, make sure it’s not secured on your home (like a mortgage). You might lose your home if a loan is secured on your home and you can’t pay it back.
You should only use your new loan or card to help you pay off the debt you already have. Don't spend any more on your card - it’s a good idea to cut it up so you can’t use it any more.
Compare the cards or loans you can get from different companies. You’ll need to think about:
- if your old credit card company will charge a fee to move your balance to another card
- how much interest and charges you’ll pay on the new card or loan - find out how to compare credit deals
If you can't get another card or loan
You might not be able to get a card or loan if you don't have a good credit rating. This could happen if you've applied for lots of credit cards or missed a monthly payment.
It's worth checking your credit rating is right. You won’t make the rating worse by checking it, and you might be able to correct a mistake to improve your rating. You can find out how to check your credit rating on the Money Advice Service website.
If you can't get a new card or loan, keep paying as much as you can on the old card. You can use our budgeting tool to help you make the most of your money, or ask your nearest Citizens Advice to help you.