Persistent Debt: What Is It And How You Can Pay It Back

Are you spending more on the interest and charges than the balance for more than 18 months? Then it's time that you must work on raising the payments. Making minimum payments on your credit card can prompt the credit card company to ask you to increase it.

The company might send you letters suggesting you to increase the amount of monthly payments on your credit card. Initially, this rule is only applied to credit cards, but now even store cards and catalog account fall under this guideline.

A Brief Insight into Persistent Debt

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.

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.

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.

The minimum payments that you make are actually the interest and the charges of the credit card. 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.

When Does the Credit Card Provider Inform You About it?

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.

What Happens When You Don’t Increase the Payments?

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 18 months

So you have spent more on interest than on the actual balance of the card for 18 months. Now, your credit company will contact you informing that you are in persistent debt. Also, they will suggest you some methods. So, if you follow them you can successfully get your card out of this debt within the next 18 months.

After 27 months

If you still act on making the minimum payment your card provider will contact you again. They will then suggest ways to get rid of the persistent debt on your credit card.

After 36 months

After the completion of 36 months, if your card is still not out of persistent debt, they’ll give you two options:


In case you fail to repay the debt within a few years, they will suspend your credit card.

In case you fail to repay the debt within a few years, they will suspend your credit card.

How Do You Get Your Card Out of Persistent Debt?

There are some easy ways by which you can take your card out of persistent debt. Here’s what you must do:

Talk to Your Credit Card Company

The first thing that you must do is to approach your card company and talk to them. They might also call off the interest and charges on your credit card for the time being. You might also be considering shifting the persistent debt as a loan on another bank. Hence, it is important that you let the card provider know about this.

Avoid Using the Card and Raise Monthly Payments

The most effective way to remove a persistent debt is to stop using the card for any further purchases. At the same time, you must increase the minimum payments. This will then automatically reduce the balance of your credit card.

Explore Ways to Repay the Debt

There are multiple ways using which you can successfully pay back the debt on your credit card. You can even consider shifting the persistent debt to another credit card that is comparatively affordable and cheaper. Alternately, you check your budget and make some monthly savings to pay off the debt faster.

Here’s How You Can Repay Persistent Debt

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:

Pay a Fixed Amount Every Month

To repay the debt you need to first decide on an amount that is slightly above the minimum payment. Now, you must keep paying this amount every month until the loan is repaid.

Pay the Minimum Amount Along With a Fixed Amount Each Month

This is another method to repay the persistent loan amount. All you have to do is to pay an additional fixed amount each month apart from the minimum amount. Paying an extra amount each month can make a huge difference in the long run.

Go for a One-off Additional Payment When Possible

Whenever you can afford some extra money you can make an additional payment to the card company. However, you will have to keep paying the minimum amount every month as per the contract.

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.

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