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Sainsbury's Bank

Credit Cards Customer Support

What is Persistent Debt?

Persistent debt happens when a customer makes minimum repayments to their credit card over a long period of time (they’ve been paying back more in interest, fees and charges than they have paid towards their outstanding balance for a period of 18 consecutive months or more).

Under new FCA rules, lenders have to contact customers who are in persistent debt at various stages to make them aware of their situation and encourage them to pay more, whenever possible, so as to repay their debt quicker and save money.

How will I know if I'm in a persistent debt position?

We will write to you if your account is in this position. We’ll ask you to consider increasing your repayments and to call us if you believe you may be in financial difficulty. We’ll confirm we’ll stay in touch and that we may need to consider suspending your card and/or reducing your credit limit to avoid the debt increasing on your account.

How much should I pay each month if I'm in a persistent debt position?

Keeping up with your minimum monthly payments is the most important thing. However, this won’t help you to repay your debt quickly. Paying as much as you can above the minimum payment amount every month can significantly reduce the length of time it takes to repay your debt and the amount of interest you will pay. You can find the minimum payment on the front page of your monthly statement.

Here’s an example of how much sooner a balance of £3,000 (with an APR of 19.9%) can be repaid when the monthly repayments are increased.

  Years to repay
Pay the minimum amount per month (*£75 initially)
or
If you paid a fixed amount of £100 per month

27 years, 8 months to repay


3 years, 5 months to repay


It would cost you approximately £3,337 less in interest

 

*Minimum payment will increase or decrease as the balance changes

Please call us so we can discuss the best option for you.

There’s also information about different repayment scenarios and how long it will take you to repay your balance available online at cardcosts.org.uk. You’ll find a calculator you can use to show how much you could save in interest and how much sooner your balance could be repaid if you increase your payments. (Calculator provided by UK Finance)

How do I make payments if I'm in a persistent debt position?

  • Set up a Direct Debit or standing order to make a regular payment towards the balance.
  • If you already have a Direct Debit or standing order in place, you can increase the amount you pay each month.
  • Log in to our online banking service and select ‘Make a Payment’.
  • Send us a cheque
  • Use our automated telephony service

You can also make extra payments at any time. If you do, you’re likely to pay less in interest too.

What happens if I can't increase my payments?

Keeping up with your minimum monthly payments is the most important thing. However, if you call us we can help you find a suitable repayment option to pay back your debt much sooner.

If you don’t increase your payments, it will take you much longer to repay the balance and you’ll be charged a lot more in interest. We’ve explained in our letters that we may also suspend your card and/or decrease your credit limit to help control further debt from building up.

What support is available?

Please call us on 0808 108 0017 so we can look at options to help you repay your balance sooner. We’re available from 8am to 8pm Monday – Friday and 8am to 4pm Saturday.

There’s also information about different repayment scenarios and how long it will take you to repay your balance available online at cardcosts.org.uk. You’ll find a calculator you can use to show how much you could save in interest and how much sooner your balance could be repaid. (Calculator provided by UK Finance)

And you can go to citizensadvice.org.ukmoneyadvicetrust.orgPayplan.com or contact StepChange Debt Charity on 0800 138 1111 for information and advice about managing money and keeping your finances on track. These are just a few examples of organisations that offer confidential, unbiased free advice.

If you think you may be in financial difficulty, please contact us and we can talk about ways to help you.

How will I know when I am out of a persistent debt position?

We will continue to monitor your account and keep in touch to let you know the position on your account.

How will this affect my credit score?

  • Being in persistent debt or having your card suspended won’t affect your credit score directly, as long as you continue making your minimum monthly repayments.

    However, not reducing your debt by only making the minimum payment over a long period of time can have a negative effect on your credit score.

I received a letter telling me I'm in persistent debt and that my card might be suspended. Will my card be suspended if I take an emergency payment freeze?

Please don’t worry. Customers who are at certain stages of the persistent debt journey will receive a letter saying they must take action or their card may be suspended. Your letter was issued prior to us being aware of your current situation and you will still be able to use your card while you’re on an Emergency Payment Freeze. Once your emergency payment freeze ends, we will be in touch with you regarding your card and to encourage you to discuss your options with us.