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Credit card debt

Credit card debt. What to do if you cannot pay

When you owe money on your credit card, the people you owe must follow rules set out by law. Action can be taken against you to collect the debt but you have the chance to avoid this.

Credit cards are covered by the Consumer Credit Act (CCA). Your lender may get a county court judgment (CCJ) or use debt collection agencies if other ways to get you to pay fail.

Are you worried you cannot pay your credit card?


We can help. Get started now with free online debt advice. We will suggest ways to pay back or write off what you owe.

We will let you know if you can apply for Breathing Space. This means the people you owe cannot take action against you for up to 60 days. That includes not adding interest or charges to your debt.

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Frequently asked questions

What happens if I cannot pay credit card bills?

You need to make the minimum payment at least. If you do not do this, the account will go into 'arrears'. This means it is marked up as the payments being late or missed.

When this happens:

  1. Your lender will contact you by email, letter, text or phone
  2. They will ask you to pay what you owe
  3. Your account will 'default' if you miss two or three payments. This means you have broken the terms of the agreement
  4. They can then take further action to collect what you owe. Such as using debt collectors

What will my credit card company do?

Do not ignore letters and emails from them. If you get in touch with them there may be ways they can help before they take action to recover the debt from you.

It can help if you show your lender what you can and cannot afford to pay. You can do this by sharing a budget that shows how much money you:


  • Have coming in
  • Need to spend to cover food, housing and other bills
  • Can pay them when you have covered living costs and other debts

We will make a budget with you when you come to us for debt advice.

Your credit card company may also support you by:


  • Offering you a payment holiday. This can last up to three months
  • Making sure a payment holiday does not impact your credit score
  • Increasing your credit card limit
  • Agreeing to a payment plan based on what you can afford to pay
  • Reducing interest rates to support lower payments
  • Reducing your credit limit as you clear specific balance milestones

You need to be aware that:


  • You will not lower the amount you owe by having a payment holiday
  • There is the risk of using more credit than you can afford to pay back if your limit goes up
  • It is against the terms of most debt solutions to take out more credit. Do check if you are on a debt management plan (DMP) or another solution

Read our guides:

How do I pay off credit card debt?

  • Start by understanding your finances: Work out your monthly budget and follow it
  • Add a rainy-day fund to your budget
  • Set aside an amount to repay your credit cards
  • Set up another account for the money you will use to pay your debts
  • Stop using your credit card. It is much harder to pay if it keeps growing
  • Pay your ‘priority bills’. These include council tax and any fines you might have. Find out which bills you need to pay first
  • Get free debt help if you are not sure what to do

Can you go to jail for credit card debt?

We know people worry about this. But it is very rare for someone to go to prison for debt. You cannot go to prison for not paying a credit card debt.

Find out more about the types of debt that could lead to a prison sentence.

Creditors might say this can happen to scare you. You can make a complaint about them if they do.

Can you negotiate credit card debt?

You may not have to pay back all you owe. And you may be able to pay it back in stages.

Some creditors will accept a ‘full and final settlement’. This is when you pay off debts less that the total owed. You will need to have the money so you can pay quickly. And you should offer equal amounts to all the people you owe, to be fair to everyone.

We can help you settle your debts? Find out more about our debt settlement service.

How does a credit card affect my credit score?

Your credit score is worked out from information shared by your credit card provider.

They share:


  • How much is owed
  • The payment history
  • Your credit limit
  • How much you spent in the last month
  • How much you took from cash machines in last month
  • If you missed payments

Joint credit card debt

Credit card accounts can only be in one name.

You might think you have a joint credit card if you and partner both have a copy of the card.

It is not same as cards that are linked to joint or shared bank accounts. The second card is just to allow the other person to spend with it, using the cardholder’s account limit.

This means if it is in your name you have to pay back what is owed.

The other person does not have to pay anything back.

Before asking for a second card make sure you will not be left with any debt from your partner using it.

Minimum credit card payments and 'persistent debt'

All credit cards have a minimum amount you must pay back each month. This will be a percentage of the amount you owe.

It is often between 1% and 3% each month. So, if you owe £1,000 and your minimum payment is 3%, you have to pay £30.

There may be a minimum payment amount. Something like £5.00 a month.

What is 'persistent debt'?

This is when:


  • Your payments cover more in interest and charges than your actual credit card balance
  • This goes on for 18 months or longer

Your credit card company will contact you if you have a persistent debt. They will ask you to increase your monthly payment or seek advice from an organisation such as ourselves.

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What are credit card limits?

Creditors should run 'affordability checks' before offering credit limits. This is to make sure they are being fair to you and not putting you at risk of debt you cannot repay.

You can complain if you do not think they have checked what you can afford.

I have a good credit history

You will often be offered a higher credit limit. This could be thousands of pounds.

And your provider may offer you a higher limit after you have been with them for a while. This will be if you have a good payment record with them.

You don't have to say yes to higher limits. Think about:


  • If you need this option of extra credit?
  • Can you really repay what you would owe if you used it?

I have a bad credit history

There are cards for people with a bad credit history. They tend to have a low limit of £200 or so.

Often these cards have a high interest rate.

If you pay them back on time, they can be a good way to boost your credit rating. This can show other lenders you can be trusted. But always think first about if you can pay what you owe each month. Bearing in mind the higher interest.

How does interest on credit cards work?

It can be hard to work all these fees out. Read our guide to interest and charges.

Interest is the amount added on top of the amount you borrow. Think of it as the ‘cost’ to borrow money.

It can be anywhere between 10% and 70%.

It will be lower if you have a good credit rating.

You need to look out for the 'annual percentage rate' or APR. This is amount for the year.

Some cards are 'interest-free'. These are also known as '0% interest credit cards'.

Interest-free deals are often only for a set amount of time. Such as six months. You may not be able to get one of these cards if you have a poor credit rating.

If you pay back what you owe during this time you will not have to pay interest.

You need to check the terms of your card. You may still have to pay interest if you use a card machine even if it is 'interest-free'.

Late payment charges are on top of any interest you pay.

How do credit card balance transfers work?

You may be able to transfer the balance to another card. This means moving the amount you owe to another credit card account.

You may be able to pay what you owe faster if you move the balance to an interest-free card.

But there are often fees for balance transfers.

This fee will be around 2 to 3% of the amount you are transferring. This is a one-off fee.

So, if your balance is £1,000 and your balance transfer fee is 3%, you have to pay £30.

Cut up old credit cards when you clear the balance on them. This will stop you from being able to use them.

Not sure if your credit card debt is a problem?

Take two minutes to answer a few simple questions, so we can understand the best way to help you.