Credit Card Debt

If struggling with credit card debts, it’s common to feel like you’re the only person in the world with this problem. However, the reality couldn’t be more different. It’s estimated that Britons owe around £72.5billion on credit cards and with households facing an average unpaid credit bill of £2,688, some may feel it’s simply impossible to clear the debt.

Simply put, many people are grasping at straws to get by. The most affected are shift and gig workers who frequently have to shop on credit cards to just get by – racking up further debts. We know this all too well - and if you want to discuss your circumstances with us, we’re ready to listen. Not only that, but your situation is so common that we’ve probably helped someone like you already today.

When do credit card debts become a problem?

Credit cards often have a minimum monthly amount you’ll be expected to repay so if you’re unable to keep to this, you may end up in a situation called persistent debt which is very difficult to get out off.

This is the most common problem that many credit card holders seem to experience. Another choice which may come back to haunt you is having several cards.

Once you max out one, it is very easy to switch to another. If debts are mounting, and you don’t see a way to resolve these, then it’s time to consider your options. The first step is accepting your situation and determining which solutions are available to you.

Although you should initially contact your credit card provider - as they may be able to set up a payment plan for you - there are other options available.

Persistent credit card debt explained

Your credit card will be classed as being in persistent debt if – over 18 months – you’re paying more in interest and charges than you’re actually paying towards reducing the loan.

After this 18-month-period, your lender will notify you about the persistent debt and encourage you to pay more. After 27 months, if your situation hasn’t improved, the provider will contact you again. At the 36-month-stage, if you’re still in persistent debt, you’ll receive another letter. However, this time, the lender will make you take action on your debt.

This could include implementing a repayment plan or suspending the credit card.

What if I can’t pay credit card debt?

If you’ve missed a payment on a credit card, your provider will usually send a letter notifying you about the incident and asking for the money. You mustn’t ignore this. If you do, the situation will escalate. This could eventually lead to:

  • Additional penalty charges.
  • The incident being noted on your credit report – notifying other lenders you’ve struggled to make payments.
  • Legal action and debt collectors being called in to take what is owed.

Therefore, when this letter arrives, you should call the provider straight away to explain the issue and attempt to rectify the situation.

How can I pay off my credit card?

If you’re struggling with just one credit card, perhaps one of the best solutions is to stop using it and then contact the provider. By explaining the situation to them, you may be able to organise a repayment plan.

Alternatively, it might be possible to negotiate affordable payments until your financial situation improves.

This is usually helped if – until now – you’ve been making regular payments on the card and have generally kept to the terms and conditions.

However, this is at the credit card provider’s discretion. Plus, this is only a solution for one creditor. If you’re struggling to repay multiple credit cards, this method might not work.

What should be a better solution – for all your credit cards – is to do what you’re doing what now. You’re looking to work with a specialist to resolve your debts.

Can you get credit card debt written off?

Through a solution called an IVA, we can get credit card debt written off. Although you will have to make payments towards this agreement, once it ends, any remaining debt is written off.

There’s no solution which will allow you to completely write off your debts without consequence – but, via this method, we can generally manage thousands.

What is the best way to clear credit card debt?

If you're struggling to pay even the minimum amount back towards your credit card debt, you may need to look at options which help you write these off.

This could include the IVA or another solution. At MoneyFixers, we’re available to help identify something which is right for you. You can contact us today for a no-obligation chat and our advisors will be happy to listen.

Whatever your situation, they have heard it all before. The most important thing to remember is that you’re not alone. Credit card debt most likely affects your neighbour, a friend, or family member. The only difference is you’re doing something about it.