Persistent debt is a credit card position where, over an eighteen month period, a customer pays more in interest, fees and charges than they repay of the original balance. Under FCA rules the card provider must then contact them and offer help.
In one line: Persistent debt is when interest and charges on a card outweigh what you repay of the balance over eighteen months.
How persistent debt works
FCA rules introduced in 2018 require card firms to monitor whether, across eighteen months, a customer has paid more in interest, fees and charges than towards the balance. If so, the account is in persistent debt.
Someone paying only the minimum on a 2,500 GBP balance can fall into this position, because the bulk of each payment covers interest rather than reducing what is owed.
The provider must contact the customer at set stages, suggest paying more where affordable, and eventually propose a way to clear the balance over a reasonable period if the pattern continues.
Common confusions
Persistent debt is a specific regulatory test over eighteen months, not simply carrying a balance. Using a card and clearing it in full each month does not trigger it.
It often follows from paying only the minimum payment month after month, which is why the rules link the two and require the provider to intervene.
Primary source: FCA: persistent debt (credit cards)