Persistent debt | Barclaycard (2024)

Table of Contents
Persistent debt What you need to know How will I know if my account’s in persistent debt? Why it’s important that you take action Carry on with your current minimum payment Your new personalised payment amount Things you need to know about Persistent Debt Why are you telling me about persistent debt? Have I done anything wrong if I receive a letter about persistent debt? I don’t think I’m in persistent debt. Why does the letter say I am? Who changed the rules? Can I keep using my card? Things you need to know about your payments I’ve been paying the minimum amount each month. Why are you now asking me to pay more? How does the personalised amount work? Why don’t I have a personalised amount? Can I just increase my minimum payment? What happens if I don’t increase my payments? What if I’m really strapped for cash one month? Can I pay off my balance faster? What does it mean for my credit score? I’m worried I won’t be able to increase my payments regularly. What should I do? I haven't received my Personalised Amount for this month - What should I pay? I have received a letter informing me my account is in persistent debt, what happens if I have taken a Payment Holiday? My account has been in persistent debt for 36 months and I have taken a Payment Holiday, what do I need to do? Things you need to know about Paydown Plans How does a Paydown Plan work? If my card is suspended, will my credit score be affected? Why do you need information about my income? What information about my income do you need? Worried about debt? We can help
Persistent debt | Barclaycard (1)

Persistent debt

What you need to know

If you are trying to call us, our lines are very busy at the moment and we have fewer colleagues than usual on the phone.

You can check your balance, make a payment, and manage your Barclaycard using our app, online servicing or automated telephone service.

During this time, there are a few things we’d like to remind you about persistent debt:

• We would never want you to pay more than you can afford, so if we’ve sent you a communication about increasing your payments above your minimum payment level and this isn’t affordable, there is no need for you to do so. Just carry on aiming to pay at least your minimum payment each month.

• If you can increase your payments, you’ll reduce the risk of your account remaining in persistent debt for over 36 months and your card being suspended in the future – as well as paying less interest.

• If your account has been in persistent debt for over 36 months, we’ll be back in touch over the next few months to look at affordable options to help you pay down your balance over a reasonable period – this could involve interest rate reductions and other concessions.

Accounts which have been in persistent debt for over 36 months won’t be suspended just yet and we’ll always get in touch with plenty of notice before this happens.

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We’re supporting new rules that have been introduced by the Financial Conduct Authority (FCA) with the aim ofhelping credit card customers avoid long-term debt. Ifyou’ve been making minimum or low payments over thepast 18 months, you’ve paid more in interest, fees andcharges on your Barclaycard than towards paying backwhat you’ve borrowed. And under the new rules, thismeans your account is in something called ‘persistentdebt’.

Persistent debt | Barclaycard (3)

How will I know if my account’s in persistent debt?

We’ll keep an eye on your account and let you know. We’llthen suggest a personalised payment amount that willhelp you get out of persistent debt.

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Before you change your payments, please make sure youcan afford the increase. If you can, you can update yourpayments in one of these ways:

Log into Barclaycard online servicing and set up orupdate a fixed Direct Debit with the new amount

Call us on 0333 200 9090and set up or update a fixed Direct Debit with the new amount.

For any persistent debt questions, please call 0333 200 9090.

Why it’s important that you take action

Here’s a demonstration of how different monthly payments can affect the time it’ll take to clear abalance of £5,000 – and the amount of interest you’ll pay. The top figure is your current minimumpayment, and the bottom figure is what we’d suggest as your new personalised payment amount.

Note – this example is a guide based on a balance of £5,000 with an interest rate of 19.9% APR with no balance transfer or purchase offers.

  • It’s calculated on approximate payment rates which vary by provider and product
  • It assumes no additional spend on the card, no fees are incurred and the same static interestrate is paid on all balances

Try it for yourself with our repayment calculator.

Carry on with your current minimum payment

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(This decreases as your balance goes down)

Your new personalised payment amount

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(Fixed at £149 for 4 years)

  • Things you need to know about Persistent Debt

    Why are you telling me about persistent debt?

    New rules have been introduced by the Financial Conduct Authority (FCA) with the aim of supporting credit card customers avoid long-term debt. If you’ve been making minimum or low payments over thepast 18 months, you’ve paid more in interest, fees and charges on your Barclaycard than towards paying back what you’ve borrowed. And under the new rules, this means your account is in somethingcalled ‘persistent debt’.

    Have I done anything wrong if I receive a letter about persistent debt?

    No, you haven’t done anything wrong – lots of customers making minimum or low repayments have been sent this letter.

    If you can’t increase your payments sufficiently, your account will remain in persistent debt and we’ll work with you to repay your balance over a reasonable period of time, at an amount that’s affordable for you.

    I don’t think I’m in persistent debt. Why does the letter say I am?

    Persistent debt is a term used by the Financial Conduct Authority (FCA). It describes any account where the person is paying more in interest, fees and charges than towards paying back what they’veborrowed. And this is the case with your Barclaycard. Remember – credit cards are designed for short-term borrowing. It’s best not to keep a lot of debt on credit cards for a long time. If you want toborrow money for a long time, a loan may be more helpful.

    Who changed the rules?

    The rules have been created by the organisation that regulates the banking industry – the Financial Conduct Authority (FCA).

    Can I keep using my card?

    Yes – as long as your account’s open, you can carry on using it. If we need to suspend your card we will let you know before this happens. If you do spend on your card, please make sure you can afford any increase to your monthly payment.

  • Things you need to know about your payments

    I’ve been paying the minimum amount each month. Why are you now asking me to pay more?

    Your minimum payment is set at a low level to give you the flexibility to pay low amounts for a short time. It’s not a good idea to pay low amounts for a long time as this will mean you pay more in interestand it will take you a long time to pay off your balance.

    How does the personalised amount work?

    We’ve worked out how much you need to pay each month to help you pay less interest and get out of persistent debt. This is calculated to ensure you pay at least double any interest, fees andcharges over this 18-month period. The amount will vary each month if your balance changes or you’ve paid less than your personalised amount in previous months.

    Why don’t I have a personalised amount?

    For us to work out your personalised amount, your account needs to be up to date. Once you’ve got things on track, we’ll give you more information about what you need to pay to stay out of persistentdebt in the future. Sometimes your personalised amount may be equal to your minimum payment – but remember, paying more will always help you pay down your balance quicker.

    Can I just increase my minimum payment?

    Your minimum payment’s there to give you flexibility when money’s tight. It’s better to make higher payments when you can. And you may find it easier to set up a Direct Debit for a fixed amount that’shigher than your minimum amount.

    What happens if I don’t increase my payments?

    Under the rules, you have 18 months to get out of persistent debt. If you’re still in persistent debt after this time, we’ll work with you to repay your balance over a reasonable period of time, at amount that’s affordable for you – this may involve us having to suspend your card.

    What if I’m really strapped for cash one month?

    Then you can pay the minimum amount. But bear in mind that you’ll need to pay even more in the future. If you can’t afford to make your minimum amount then let us know and we’ll see how wecan help.

    Can I pay off my balance faster?

    Yes – as long as your account’s open, you can carry on using it. If we need to suspend your card we will let you know before this happens. If you do spend on your card, please make sure you can afford any increase to your monthly payment.

    What does it mean for my credit score?

    Making minimum or low payments over time can affect your credit score, which helps other lenders decide whether to lend money to you. So paying more each month can help with that. However, there’sno direct link between your credit score and your account being in persistent debt.

    I’m worried I won’t be able to increase my payments regularly. What should I do?

    Please make sure you can afford any increases before you change your monthly payments. If you’d like to talk to us about your financial situation and see if it’s possible to increase your payments, please get in touch on0808 169 7904(+44(0)203 9126646from abroad)and we’ll be happy to talk through your options with you. Alternatively, you canvisit our money worries hub to find out how we can help.

    I haven't received my Personalised Amount for this month - What should I pay?

    If you still have last month’s communication, and your balance hasn’t changed too much, then please refer to that to get an idea of how much you should be paying, and try to pay as much as you can afford.

    I have received a letter informing me my account is in persistent debt, what happens if I have taken a Payment Holiday?

    We will continue to assess your account to see if it remains in persistent debt. You may still receive a letter about this but you don’t need to take any further action for now. Once your payment holiday has ended, and if it’s affordable to do so, you should think about paying more than the minimum payment each month – this will help you pay off your balance quicker and pay less in interest.

    My account has been in persistent debt for 36 months and I have taken a Payment Holiday, what do I need to do?

    We may have recently contacted you about your account being in persistent debt and to offer you a Paydown Plan. We also let you know that your card would be suspended and the date this would happen, if we hadn’t heard from you.

    However, if you have taken a payment holiday on your card, and to help you during this difficult time, you can continue to use your card for now. We’ll be in touch again after your payment holiday ends to let you know what happens next.

    If you had taken a payment holiday during the period that your account had been in persistent debt for 36 months, then we will send you your letter with your Paydown Plan offer once your payment holiday ends.

  • Things you need to know about Paydown Plans

    How does a Paydown Plan work?

    A Paydown Plan is a fixed monthly payment plan that can help you clear your balance sooner, while paying less interest. To see how we can help you set up a personalised plan that’s affordable for you, watch our quick, handy video below.

    If my card is suspended, will my credit score be affected?

    As long as you keep up with your monthly payments, there won’t be any impact on your credit file.

    Why do you need information about my income?

    We don’t have all of the information we need to complete our assessment for your application for another card. We need you to send us further information about your income so that we can make the best decision possible.

    What information about my income do you need?

    We only want documents that you should already have available, for example, three consecutive months of bank statements, your last tax return, or your payslips. Follow the steps in the table here to find out what documents you need to send.

Worried about debt? We can help

Are you finding it difficult to stay on top of your finances? Has a change left you with less money to pay your bills? You’re not alone. Visit our money worries hub to see how Barclaycard has helped peoplewho may be in similar situations to you.

For free, independent advice, you can also contact

MoneyHelper- visithttps://www.moneyhelper.org.uk/en

StepChange Debt Charity– call them on0800 054 6734or go tostepchange.org.They’ll help you stay in control of your finances by creating a budget with you. By understanding your budget better, you’ll know if you can cut back on spending in some areas and pay more towards your balance.

National Debtline– if you live in England, Scotland or Wales, go tonationaldebtline.orgor call0808 808 4000. For help managing your money, use their digital device tool.

Citizens Advice – visit your local Citizens Advice or go tocitizensadvice.org.uk

Samaritans - call 116 123 at any time or emailjo@samaritans.org

As an enthusiast with substantial knowledge in financial regulations and credit management, let's delve into the intricate details of the provided article on persistent debt and its implications for Barclaycard customers.

Firstly, the article emphasizes the impact of persistent debt, a term introduced by the Financial Conduct Authority (FCA). The FCA, as the regulatory body for the banking industry, has set new rules aimed at supporting credit card customers in avoiding long-term debt. If a customer has been making minimum or low payments over the past 18 months, the article suggests that they may have paid more in interest, fees, and charges than towards the actual borrowed amount, categorizing their account as being in 'persistent debt.'

Key Concepts:

  1. Persistent Debt Definition:

    • Persistent debt is a term coined by the Financial Conduct Authority (FCA), indicating a situation where a credit card user pays more in interest, fees, and charges over an extended period than towards repaying the borrowed amount.
  2. Rules and Regulations:

    • The Financial Conduct Authority (FCA) has introduced new rules to address persistent debt issues among credit card customers. The rules are designed to prevent customers from remaining in long-term debt by encouraging increased payments.
  3. Communication and Notifications:

    • Customers are notified if their account is identified as being in persistent debt. The article mentions that if the minimum payments are not increased within 18 months, the card might be suspended, and the customer will be contacted regarding affordable options to pay down the balance.
  4. Payment Adjustments:

    • Customers are advised to check if they are in persistent debt and, if so, consider adjusting their payments. A personalized payment amount is suggested, calculated to help users pay less interest and eventually get out of persistent debt.
  5. Payment Methods:

    • Customers are provided with various methods to adjust their payments, such as using the Barclaycard online servicing, setting up or updating a fixed Direct Debit, or calling a specified helpline.
  6. Impact on Credit Score:

    • Making minimum or low payments over an extended period can affect the credit score. The article encourages customers to pay more each month to mitigate potential negative effects on their creditworthiness.
  7. Paydown Plans:

    • In cases where an account has been in persistent debt for 36 months, the article introduces the concept of Paydown Plans – fixed monthly payment plans aimed at helping customers clear their balance sooner, reducing interest payments.
  8. Income Verification:

    • There is mention of the need for additional information about the customer's income for applications or assessments related to another card. Documents such as bank statements, tax returns, or payslips may be required.
  9. Assistance for Financial Worries:

    • The article provides information for customers facing financial difficulties, suggesting resources such as MoneyHelper, StepChange Debt Charity, National Debtline, Citizens Advice, and Samaritans for free, independent advice and support.

In summary, the provided information revolves around the rules set by the FCA to address persistent debt, how customers can adjust their payments, the potential impact on credit scores, and additional assistance available for those facing financial challenges. If you have any questions or need further clarification on these concepts, feel free to ask.

Persistent debt | Barclaycard (2024)
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