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Dealing with credit card debt


When they’re used carefully, credit cards can sometimes be helpful. They can help you to improve your credit score, and can give you extra protection on large purchases thanks to the Consumer Credit Act. 

But they can be an expensive way to borrow – and unfortunately, thanks to interest rates and the convenience of having a credit card, it’s all too easy to rack up credit card debt without really intending to. 

Credit card debt can feel overwhelming, but we’re here to help make things simple. In this guide, we’ll take you through everything you need to know about credit card debt. 

And if your credit card debt is being managed by Lowell, keep reading to find out how we can support you and help you start your journey towards clearing your debt. 

In this guide, we cover:

This content is intended to be an impartial guide regarding credit card debt. Lowell Financial Ltd does not offer legal or financial advice. You can find out more about the organisations you can contact in our guide on debt help and support.


What is credit card debt?

Whenever you spend on your credit card, you add to your balance. This balance is interest-free for a set period of time – usually around 20-30 days – but then after this, the balance needs to be settled. This is usually called ‘paying off’ your credit card.

It’s up to you if you pay off your balance in full each month when it’s due, or over time. You can choose to make a 'minimum payment', which is a proportion of your balance, or an amount set by your lender.

If you pay off the balance within your interest-free period, you won’t be charged interest. After that, interest may be added to the balance.

Credit card debt example

  • You spend £100 on shopping on January 1st.
  • Your credit card bill is due on February 1st. Your minimum payment might be £5, so if you made your minimum payment, you’d have £95 remaining.
  • If your credit card interest rate was 20%, £19 of interest would be added to the balance you owe, leaving you with a balance of £114.
  • This could then continue each month, even if you never spend any more money on the card.
  • On your March credit card bill, if you’re still not able to pay off your credit card in full, and can only make the minimum payment of £5, your balance would then be £109. But interest would then be added, bringing your total to £130.80.

As you can see, it’s easy for credit card debt to snowball if you’re only able to make the minimum payments each month. 

What happens if I can’t pay the minimum payment on my credit card? 

If you’re not able to pay the minimum payments, then your account will go into arrears. If this happens, your lender will get in touch with you to ask you to make a payment. If you can’t, your account will default, and the lender might choose to look into legal action.

If you’re concerned about not being able to make your minimum payment, it’s best to get in touch with your credit card company to see how they can help. They may be able to freeze your interest, pause your card repayments, or look into a payment plan for your credit card debt.

What is persistent debt on a credit card?

Persistent debt is when you’re paying more in interest and other fees than what you’re actually paying back on your credit card balance for at least 18 months. Ultimately, this makes it harder to reduce the amount that you owe and will take longer to clear off.

In a lot of cases, the reason people end up struggling with persistent debt is because they’ve been consistently making minimum payments. Whilst minimum payments aren’t necessarily problematic, they could lead to an issue over time.

For more information, National Debtline have a persistent debt factsheet explaining what steps your lenders may take and ways that you can try take control of your situation.

How to pay off credit card debt

When it comes to paying off credit card debt, there are a few steps you can take. There’s no single ‘best way’ to pay off credit card debt, because everyone’s financial situation is different – but these tips will hopefully help to give you somewhere to start.

Work out your budget and how much you can afford to pay

To start clearing your credit card debt, you’ll need to work out how much you can afford to pay each month. Use tools like our free budget calculator to easily look at your income and outgoings, and work out how much you can afford to pay towards your credit card debt.

Look into the debt snowball method

The debt snowball method can help if you have multiple kinds of debt, including credit card debt. It focuses on clearing one debt at a time, from the least to the most expensive. Our complete guide to the debt snowball method can help explain more about this, so you can see if it’s right for you.

Stop using your credit card if you can

It can be hard to stop using your credit card, especially if you’re in a difficult financial situation. But using your credit card when you’re already in debt can just add to the problem, especially as interest adds up. If it’s at all possible, stop using your credit card until you’ve managed to clear some of your existing debt.

Get free debt help and support

If you’re worried about credit card debt, you can always get free, independent debt help and support from charities like StepChange, National Debtline, and MoneyHelper.

If your debt is being managed by Lowell, get in touch

If your credit card debt is being managed by Lowell, please get in touch. Our team is supportive, friendly, and experienced when it comes to finance and debt. We work with people just like you every day, and we won’t ever judge you for your circumstances or make you pay more than you can afford.

If you’re in a difficult situation, we might be able to help – so speak to our friendly team and start working with Lowell so you can take control of your finances.

Can you go to prison for credit card debt?

In short, no, you usually can’t be sent to prison simply for having credit card debt.

Many people will worry about the potential consequences of having unpaid credit card debt. But only certain kinds of debt can result in a prison sentence – such as council tax debt - and even then, this kind of action is only taken as a last resort.

If you repeatedly miss payments on a credit card, then, as a last resort, a lender could get a Country Court Judgment (called a CCJ) against you.

This is a court order that orders you to pay money back to the lender, and this could lead to further legal action if you’re unable to pay, but even then, a prison sentence isn’t one of the common consequences. If you’re worried, check out our guide to CCJs and debt to understand more about a CCJ and how they can affect you.

Can credit card debt be written off?

Under some circumstances, a lender might choose to write off credit card debt – but this usually only happens in very serious cases.

It’s important that you don’t ignore a credit card debt in the hope that a lender might write it off, as this may not happen. Unless you get in touch with the lender, they might not know about your circumstances or be able to help.

There might be steps that a lender can take to help support you while you get your finances in order, which can be helpful, so it’s always worth getting in touch with them.

What is a balance transfer credit card?

A balance transfer credit card lets you transfer outstanding card debts onto a new credit card, usually one that has a promotional 0% interest rate. This allows you to pay down your debt without incurring interest for as long as the 0% interest rate lasts.

If you have multiple credit card debts, then consolidating them onto a single balance transfer card can help simplify things.

However, in order to get a balance transfer credit card, your credit will need to be in good shape to help you get approved. You’ll also need a high enough credit limit on the new card to transfer all of your debts.

If you do decide to apply for a balance transfer credit card, it’s really important to read the terms and conditions carefully. The 0% interest deal may only apply for a limited time, and afterwards the interest rates can be very high.

Debt consolidation loans for credit card debt

As an alternative to a balance transfer credit card, you could consolidate all of your existing debts into one product: a debt consolidation loan.

It works a bit like a balance transfer card in that you can combine your different debts into one place with one monthly payment, but the difference is that the loan has a set monthly payment and a payment schedule you’ll need to stick to.

A debt consolidation loan can have a lower interest rate than a balance transfer credit card, but you’ll need to make sure that you can afford the monthly payments, as missing them could further damage your credit.

What happens to credit card debt when you die in the UK?

Debt, including credit card debt, isn’t inherited in the UK. Your loved ones won’t be liable for your credit card debts, unless you had a joint card or agreement, or they guaranteed credit for you.

When someone dies with debts, that debt is usually paid out of their ‘estate’ – that’s the money, property, and possessions they leave behind. We have a complete guide to what happens if you or a loved one dies with debt, which explains the whole process.

If someone you love has died and they had outstanding debts with Lowell, we understand how difficult things must be and are here to help. Please get in touch with our team and we can explain everything about your loved one's account.

How much credit card debt is too much?

As with many things in the world of finance, there’s no one-size-fits-all answer - it depends. ‘Too much’ debt isn’t a set value because everyone’s finances are different.

Having said that, there are a few rules that it can help to try and stick to.

Credit utilisation

Your credit limit will be determined by lenders based on your credit history. But most lenders prefer that you don’t use more than 30% of your credit. It’s not a hard and fast rule, but if you have a credit limit of £1,000, then trying to keep your balance below £300 is a good sign to credit companies that you can be trusted to use credit responsibly.

The 50/30/20 rule

A general rule of thumb that can be helpful when you’re looking at your finances and your credit is the 50/30/20 rule.
This budget system divides your monthly income into three areas:

  • 50% is used for needs
  • 30% is used for wants
  • 20% goes into savings 

If your credit card debt is so high that you can’t afford to make your minimum payments out of the ‘needs’ fund, or you can’t afford to put money into savings or wants, then it might be a sign that your credit card debt is too high.

Minimum payments

With all of these rules, the most important one is probably being able to make the minimum payments on your credit card. If you find that you regularly can’t afford the minimum payment on your credit card debt, that’s a sign that your debts might be putting you under serious financial strain, and it might be time to seek some advice and assistance.

Credit card debt might feel daunting, especially if interest rates have caused your debt to snowball. But there is plenty of help and support available, and starting to pay off your credit card debt can help you on the road to financial health.

If your credit card debt is being managed by Lowell, please get in touch with us. We’re here to help you, and we won’t ever judge you for your circumstances or make you pay more than you can afford.

If you’ve got any questions about your Lowell debt, you can get in touch with our team. Alternatively, you can manage your account through our easy-to-use mobile app.

And if you’re looking for more information about financial topics, you’re in the right place – check out the rest of the handy guides in our Debt Guidance Hub.

First Published: 10th May 2024