Credit card debt

All credit cards come with a credit limit. This is the maximum amount you’re allowed to borrow.

When you have a credit card, you’ll get a monthly statement showing:

• how much you owe
• the lowest amount you can pay that month
• when you need to make your payment

If you pay off what you owe in full each month, you won’t be charged. But if you don’t, you may be charged interest on your outstanding balance.

Cash withdrawals may also come with fees and immediate interest.

And if you don’t make your monthly minimum payment, there may be a penalty and your credit score may be affected.

Find out more about what to bear in mind before choosing and applying for a credit card.

If you’re struggling to pay off your credit card debt, your provider has a responsibility to help. Options available to you may include:

A payment holiday

If you’re experiencing temporary problems, your credit card provider may allow you to stop paying for a short time.

This can be useful if something unexpected has cropped up, like being made redundant or falling ill.

Your credit rating may suffer though, as your lender reports any missed payments.

A lower interest rate

If you’re really struggling, your provider may agree to a lower interest rate to reduce your payments.

A payment plan 

If you’ve been paying off your debt for 36 months and, in that time, you’ve paid more in interest and charges than of the amount borrowed, your provider might write to you offering a four-year payment plan that will allow you to clear what you owe.

If you can’t pay the amount suggested, let them know how much you can afford. It’s important to keep communicating with your provider. If you can’t afford to pay anything, tell them this.

And if you’re still being charged interest and/or fees, ask them to stop.

If you can’t agree a repayment plan, your provider may suspend your credit card.

You don’t need to wait until your provider writes to you offering a payment plan. If you would like to work out an arrangement to pay off your credit card debt, reach out to them. Use our free budget planner to work out how much you can pay towards your debt each month.

Just be aware, if you don’t make your minimum monthly payments, it may affect your credit score.

In certain circumstances, it may be possible to get credit card debt written off. You may be able to do this:

• through a debt solution
• with medical write off
• if you’ve had to contact with your provider for at least six years
• if you’re facing exceptional circumstances