What is Persistent Debt?

No, you haven’t done anything wrong – lots of customers making minimum or low repayments have been sent this letter. Your account is not officially in arrears, as you have been making the minimum or more than the minimum payments each month. However, due to the change, you are encouraged to increase your payments in order to not fall further into persistent debt.

If you can’t increase your payments sufficiently, your account will remain in persistent debt and we’ll work with you to repay your balance over a reasonable period of time, at an amount that’s affordable for you. However, if you cannot afford to increase your payments sufficiently, your account will be suspended.

Persistent debt is a term used by the Financial Conduct Authority (FCA). It describes any account where the person is paying more in interest, fees and charges across the last 18 months than what they have borrowed. And this is the case with your Swimwear365 account. Remember – retail credit is designed for short-term borrowing.

The rules have been put in place by the organisation that regulates the financial services industry in the UK – the Financial Conduct Authority (FCA).

The FCA’s roles includes protecting consumers, keeping the industry stable, and promoting healthy competition between financial service providers.

No, we aren’t asking you to pay off your full balance. You just need to pay off more of the amount you’ve borrowed compared to the amount of interest and charges. However much you pay, always make sure you can afford it.

Yes – as long as your account’s open, you can carry on using it. If you remain in persistent debt for 36 months, we may need to take action such as suspend your account. However, we will let you know before this happens. If you do continue to spend on your account, please make sure you can afford any increase to your monthly payment.

Persistent debt is a term used by the FCA to describe any account where the person is paying more in interest and charges than towards paying back what they borrowed. This includes any interest charged for items purchased on Buy Now Pay Later. It doesn’t necessarily mean you have any financial or debt problems.

Your minimum payment is set at a low level to give you the flexibility to pay low amounts for a short time. It’s not a good idea to pay low amounts for a long time as this will mean you pay more in interest and it will take you a long time to pay off your balance.

Your minimum payment is there to give you flexibility when money is tight. It’s better to make higher payments when you can. And you may find it easier to set up a Direct Debit for a fixed amount that’s higher than your minimum amount, but you should contact us to ensure the amount is sufficient and so we can ensure it’s affordable. You can contact us on 0333 200 3035 to discuss paying a higher amount and/or setting up a Direct Debit for a fixed amount.

Under the rules, you have 36 months to get your account out of persistent debt. If you’re still in persistent debt after this time, we’ll work with you to repay your balance over a reasonable period of time, at an amount that’s affordable for you – this may involve us having to suspend your account.

Then you can pay the minimum amount. But bear in mind that you’ll need to pay even more in the future. If you can’t afford to make your minimum amount, then let us know and we’ll see how we can help.

Making minimum or low payments over time can affect your credit score, which helps other lenders decide whether to lend money to you. So paying more each month can help with that. If we do need to reduce your credit limit due to your account being in persistent debt, then this may reduce your credit score.

Please make sure you can afford any increases before you change your monthly payments. If you’d like to talk to us about your financial situation and see if it’s possible to increase your payments, please get in touch on 0333 200 5734 and we’ll be happy to talk through your options with you. Lines are open Monday to Friday between the hours of 8.00am to 6:00pm.

Making minimum payments over time can affect your credit score. However, the suspension of your account itself will not impact your credit file, as we do not report suspensions of accounts to Credit Reference Agencies.