Stuck paying interest? Get out early
Lesson 11 of 12 in our free Credit Cards: Tool, Not Trap guide: a 5-minute money game with the key points below.
Shown for England. Some rules here are different in Scotland, Wales and Northern Ireland: the lesson shows your nation's version.
This lesson is in the full version.
Free with a code from your uni, college, council, landlord or employer (worth £600/year). Lesson 1 of Credit Cards: Tool, Not Trap is free for everyone.
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Questions you'll answer
Mo gets a letter saying he's in 'persistent debt'. What's it for?
Quick facts
- Fact: “If you're still in persistent debt after 36 months, the provider must offer a way to clear it in a reasonable time.” — That's the second stage of the FCA rules. It might mean a repayment plan.
- Myth: “Telling your card provider you're struggling will only make things worse.” — Lenders must treat customers in difficulty fairly, and talking early usually means more options.
- Fact: “Free, confidential debt advice is available from charities like StepChange and National Debtline.” — You never need to pay for debt advice.
- Listing every debt with its balance, APR and minimum payment → Helpful. You can't make a plan without the full picture.
- Calling a free debt charity for a plan → Helpful. Free, confidential, and they've seen it all before.
- Taking a payday loan to cover the card payment → Makes it harder. Borrowing to repay borrowing usually deepens the hole.
- Leaving the card provider's letters unopened → Makes it harder. Problems grow in envelopes. Open them, or ask someone to help you.
- Stopping new spending on the card → Helpful. Stops the balance growing while you pay it down.