Glossary · UK
What is Persistent Debt Rules?
FCA rules requiring credit card providers to intervene — and eventually offer to reduce or waive interest — when a customer has paid more in interest and charges than they have repaid of their balance over 18 months.
Full Definition
The FCA's persistent debt rules, in force since 2018, target credit card customers who make only minimum or low repayments over a long period, ending up paying far more in interest and charges than they actually reduce their balance by — a pattern that can leave customers in debt for years or decades while generating substantial profit for the card issuer. Under the rules, if a customer has been in persistent debt for 18 months (paying more in interest, fees and charges than they have repaid of the principal balance), the card provider must contact them with guidance on repaying faster. If the customer remains in persistent debt after 27 months, the provider must proactively suggest a repayment plan, and after 36 months of persistent debt the provider must offer to help the customer repay the balance over a reasonable period, which can include suspending, reducing or waiving interest and charges if the customer cannot otherwise afford faster repayment. The rules sit alongside separate FCA requirements on assessing affordability before increasing a customer's credit limit.