So you have received a letter from the credit card company that has the word ‘debt’ mentioned in it. You might be a bit surprised or confused. But, persistent debt isn’t actually a debt. If you pay more in interest and charges than the actual balance amount then it is called persistent debt.
Read more about the types of debt and borrowing that you must know about
Your persistent debt is calculated on the basis of your credit card activity for about 18 months. Although persistent debt isn’t that dangerous it can make your finances difficult to manage in the future.
In debt collection process it's clearly mentioned about what happen you fail to give your debt on time, your interest increases.resulting and pushing you towards your presidential debt. The minimum payments that you make are actually the interest and the charges of the credit card. Stepchange debt advice being a former debt repayment mechanism works in the direction of making the right decision accordingly. Stepchange debt advice being a former debt repayment mechanism works in the direction of making the right decision accordingly. You can then potentially lessen your credit card balance faster by making greater payments every month. Consequently, you can take your card out of persistent debt.
According to the rules, every credit card company has to inform you when they feel your card is under persistent debt. Moreover, your card company also needs to get certain information from you about the debt.
Your card company is simply following rules and wants you to avoid any debt-related issue.
If you keep making minimum payments on your card it won’t immediately affect your credit card account or its performance. The company will now constantly contact you urging you to increase the payments. In case you fail to do it they would take certain actions. They might either reduce the interest rate or can even go to the extent of suspending your account.
However, some card companies increase the minimum payment to take customers out of persistent debt. Credit card providers update the terms and conditions of the minimum payments. In case your card provider does it, you’ll get to know.
After the completion of 36 months, if your card is still not out of persistent debt, they’ll give you two options:
They will offer you an affordable payment plan which would help you remove the debt faster.
They can provide you a credit product like a loan to let you clear the entire debt.
In case you fail to repay the debt within a few years, you can contact the Stepchange debt solution. They will suspend your credit card and ultimately you need assistance from the debt management solutions for the betterment of your debt repayment as nobody loves to give any extra money as interest..
There are some easy ways by which you can take your card out of persistent debt. Here’s what you must do:
To successfully pay off the persistent debt you must first take a look at your budget. Then, go through all of your expenses and try to figure out where you can save some money. Once you finalize on the monthly savings you can follow any one of the methods to pay back the debt-money:
To sum up, persistent debt doesn’t do much damage to your financial life. But it can potentially affect your credit ratings in the future. This can lead to more serious problems later on. Hence, you must always make sure to repay your persistent debt within the permissible time. Stepchange debt management plans and solutions can help you attain that possible solution. With the wide range of availability the Stepchange is present over all UK if you are looking for the debt repayment service in Wales then Stepchange IVA Wales is present to help and make life manageable and easy If you are a resident of the Leeds then Stepchange Leeds is present for answering your queries through stepchange live chat related to our service.