Credit Card Debt
Credit cards are among the most common debts people seek help with. High interest means minimum payments can leave you repaying for decades. Several solutions can freeze interest and bring payments down to an affordable level.
Why credit card debt builds up
A typical card charging 20–30% APR with a minimum payment of 1–3% of the balance means most of each payment covers interest rather than reducing the debt. Multiple cards, balance transfers that expire and using cards for essentials all compound the problem.
What lenders must do – persistent debt rules
FCA rules require card providers to contact customers who have paid more in interest and charges than principal over 18 months, and to offer ways to repay faster. After 36 months in persistent debt the lender must offer a repayment plan or suspend the card. If you are struggling you can also ask for forbearance such as reduced payments or an interest freeze.
Your options
Card debt is unsecured and can be included in every mainstream solution: a Debt Management Plan to repay in full at an affordable rate, an IVA or Trust Deed to repay what you can afford with the rest written off, or a DRO or bankruptcy where there is no realistic prospect of repayment.
Frequently asked questions
Can a credit card company send bailiffs?
Only after obtaining a County Court Judgment and then a warrant of control. Unsecured lenders cannot use enforcement agents without going to court first.
Should I stop paying my credit cards?
Not without advice. Missed payments damage your credit file and lead to defaults and possible court action. A regulated adviser can help you prioritise and contact lenders before payments are missed.
Will my credit cards be cancelled in a DMP or IVA?
Yes – cards included in a solution are closed. Lenders will not allow continued spending on an account being repaid at a reduced rate.
Want to know if this applies to you?
Free enquiry. No obligation. Regulated advice before any decision.