Credit card debt

Missed payments on credit card bills can quickly build up into credit card debt. Find out how to keep your costs down and what to do if your spending is getting out of control.

How to keep your credit card costs down

  1. Shop around for the best credit card deals before you get a card.
  2. Budget for your credit card – work out what you can afford to pay each month before you borrow.
  3. Switch to a cheaper card if you can – but watch out for charges and short term deals that could cost you more in the long term.
  4. Pay in full each month to avoid interest charges.
  5. Pay on time and make a payment each month – or pay an extra charge.
  6. Pay more than your minimum payment – otherwise your debt will grow.
  7. Plan your spending – if you can’t afford it and don’t need it, don’t buy it!

Budget your credit card spending

However you use your credit card – as a way of budgeting for expensive costs like furniture and electrical items or for regular costs – it’s important to plan your spending so that your repayments are affordable.

Make sure you understand what your credit card repayments will be if you borrow all the way up to your credit card limit. You can ask for your credit limit to be reduced so you are not tempted to spend more than you can budget for.

Use our budget calculator to check you’ll be able to keep your spending on budget.

To work how long it will take to repay your debt if you just pay the minimum each month – and how much you’ll pay in interest – try one of these online calculators from Which or the Money Advice Service.

If you can no longer afford your credit card repayments, you will need to stop spending on your card.

Missed credit card payments

Your credit card company will let you know that you have missed a payment and will probably make an extra charge. Be careful – late payment charges can build up quickly, and you’ll have to pay interest on them as well.

If you miss three to six payments, the credit card company may send you a default notice – this is a letter setting out what you owe and when you have to pay.

If you don’t pay a credit card debt

If you are unable to pay or don’t come to an acceptable arrangement with the credit card company, they can take you to court to recover the money you owe – this could result in a county court judgement against you.

If the credit card company gets a county court judgement against you and you don’t keep to the terms of the court order – for example, you fail to pay a certain amount each month – they  can then go back to court. 

Depending on the amount of the debt and your circumstances, the company could ask the court to:

  • send bailiffs to seize your non-essential goods and sell them to pay the debt
  • make you bankrupt – if you are a homeowner, this could result in you losing your home.

You can often prevent this if you act early by:

  • negotiating with your credit card company and
  • getting help from a debt adviser.  

Get help with credit card debt

It’s important to get help with credit card debt, and any other debts you may have too. Credit card debts are known as non-priority debts but this doesn’t mean they are not important. If you have priority debts such as mortgage, rent or fuel bills, non-payment can mean you lose your home or your gas or electricity is cut off, so it’s important to budget so these are always paid off first.

Find out more about priority and non-priority debts.

Last updated: 1 January 2014