Credit card debt is one of the most common types of debt in the UK. It’s easy to rack up because cards are convenient, widely accepted, and the minimum payment seems affordable. But with interest rates often above 20%, balances can spiral out of control fast.
If you’re struggling with credit card debt, you have options: balance transfers, debt consolidation, Debt Management Plans, or an IVA if you owe £6,000+. The right solution depends on how much you owe and whether you can afford to repay in full.
Why Credit Card Debt Gets Out of Control#
Credit cards charge high interest rates — typically 18-30% APR for standard cards. If you only make minimum payments, most of your payment goes toward interest, and the balance barely moves.
For example:
- You owe £5,000 on a credit card at 22% APR
- Minimum payment: £125/month (2.5% of balance)
- If you only pay the minimum, it’ll take 27 years to clear the debt
- Total cost: £15,000+ (£10,000 in interest)
This is why credit card debt feels impossible to clear. The interest keeps piling up faster than you can pay it off.
Options for Dealing with Credit Card Debt#
Balance Transfer#
If your credit rating is still decent, you can transfer your balance to a 0% balance transfer card.
These cards offer 0% interest for 12-36 months. During this time, all your payments go toward reducing the balance instead of paying interest.
Pros:
- Stops interest piling up
- Can save thousands in interest charges
- No fees (except a small balance transfer fee, usually 2-3%)
Cons:
- You need good credit to be approved
- The 0% period is temporary — after it ends, interest kicks in (often 20%+)
- You still have to repay the full debt
Balance transfers work well if you can afford to clear the debt within the 0% period. If you can’t, you’ll end up back where you started once interest resumes.
Debt Consolidation Loan#
You can take out a personal loan to pay off all your credit cards, then repay the loan at a lower interest rate.
For example:
- You owe £8,000 across three credit cards at 22% APR
- You get a consolidation loan at 10% APR
- One monthly payment replaces three separate card payments
- Lower interest means more of your payment reduces the balance
Pros:
- Lower interest rate saves money
- One simple payment instead of multiple cards
- Fixed term (usually 3-5 years), so you know when you’ll be debt-free
Cons:
- You need decent credit to get approved
- Some lenders charge high fees or early repayment charges
- You’re still repaying the full debt
Consolidation loans work well if you can get approved and the interest rate is significantly lower than your cards.
Debt Management Plan (DMP)#
A DMP is an informal agreement where you make reduced monthly payments to your creditors.
You work with a debt charity (like StepChange or National Debtline) to set up the plan. They contact your creditors, propose reduced payments, and ask them to freeze interest and charges.
Pros:
- Affordable monthly payment based on what you can realistically afford
- Most creditors freeze interest, so your debt stops growing
- Free if you use a debt charity
- Flexible — you can pause or adjust payments if circumstances change
Cons:
- Takes longer to repay (often 5-10 years)
- Not legally binding — creditors can withdraw and restart action
- Damages your credit rating for 6 years
- You have to repay every penny (no debt write-off)
DMPs work well for smaller debts (under £6,000) where you can afford to repay in full over time.
Individual Voluntary Arrangement (IVA)#
An IVA is a legally binding agreement where you pay what you can afford for 5-6 years, then the rest is written off.
You need at least £6,000 in total debt (across all creditors, not just credit cards) to qualify.
Pros:
- Legally binding — creditors can’t take further action
- Interest and charges frozen
- Remaining debt written off after 5-6 years
- One affordable monthly payment
- Stops creditor harassment
Cons:
- Affects credit rating for 6 years
- Restrictions on spending and borrowing
- If you’re a homeowner, you might have to release equity in your final year
- Fees (deducted from your payments)
IVAs work well if you owe £6,000+ and can’t afford to repay in full. You might repay £9,000 over 5 years and have £6,000 written off.
Check if you qualify using our free IVA calculator.
Bankruptcy#
Bankruptcy is a last resort. It writes off your debts (including credit cards) within 12 months, but you lose control of your assets.
Only consider bankruptcy if:
- Your debts are overwhelming and you have no assets
- Other solutions (like an IVA) aren’t suitable
- You need a fresh start quickly
Bankruptcy has serious consequences: you can lose your home (if you have significant equity), your job might be affected (if you work in certain professions), and it stays on your credit file for 6 years.
Get debt advice before considering bankruptcy.
What to Do If You Can’t Pay Your Credit Cards#
If you’re struggling to make even minimum payments, here’s what to do:
Stop Using the Cards#
Cut up your cards or freeze them in a block of ice. Seriously. You can’t clear debt while still adding to it.
Contact Your Credit Card Company#
Call them and explain your situation. Many card companies offer hardship programs:
- Reduced interest rates (sometimes down to 0%)
- Reduced monthly payments
- Payment holidays (1-3 months)
They’d rather receive smaller payments than have you default entirely.
Prioritise Essential Debts#
Credit cards are non-priority debts. If you have to choose between paying your credit card or paying your rent, council tax, or utilities, always prioritise the essentials.
Missing credit card payments affects your credit score, but it won’t leave you homeless or without heating.
Get Free Debt Advice#
Contact a debt charity like StepChange, National Debtline, or Citizens Advice. They’ll assess your situation and recommend the best debt solution.
Don’t use a commercial debt management company that charges fees. Stick to free charities.
Can Credit Card Debt Be Included in an IVA?#
Yes. All credit card debt is unsecured, so it can be included in an IVA.
If you have multiple credit cards, you can include all of them. Your Insolvency Practitioner will list each card as a separate creditor in your IVA proposal.
Once the IVA is approved:
- All interest and charges are frozen
- Creditors must stop contacting you
- You make one monthly payment (shared among all creditors)
- After 5-6 years, remaining balances are written off
For example:
- You owe £12,000 across four credit cards
- You enter an IVA and pay £180/month for 5 years
- Total paid: £10,800
- Remaining £1,200 is written off
What Happens If You Don’t Pay Credit Card Debt?#
If you stop paying your credit cards, here’s what happens:
Months 1-3: Late payment fees and default notices
Your card company will add late payment fees (usually £12 per missed payment). They’ll send reminder letters and call you.
After 3-6 missed payments, they’ll send a default notice warning that they’ll close your account if you don’t pay.
Months 3-6: Default registered on credit file
The card company closes your account and registers a default on your credit file. This severely damages your credit score for 6 years.
Interest continues to pile up.
Months 6-12: Debt sold to debt collectors
The card company might sell your debt to a debt collection agency like Lowell, Cabot, or Arrow Global.
The debt collector will contact you demanding payment. They can’t do anything a card company can’t do — they’re just more persistent.
After 12+ months: Court action
If you continue ignoring the debt, the creditor (or debt collector) might take you to court. They’ll apply for a County Court Judgment (CCJ).
If the court grants a CCJ, they can enforce it through:
- Attachment of earnings (money deducted from your wages)
- Bailiffs visiting to seize goods
- Charging orders (securing the debt against your home)
This is why it’s critical to deal with credit card debt early. Don’t ignore it.
Is Credit Card Debt Statute-Barred?#
If you haven’t acknowledged a credit card debt or made a payment in 6 years (England/Wales) or 5 years (Scotland), it might be statute-barred.
Statute-barred debt can’t be enforced through the courts. Creditors can still ask you to pay, but they can’t take legal action.
However, if you:
- Make a payment (even £1)
- Acknowledge the debt in writing
- Agree to a payment plan
…the 6-year clock resets, and the debt is no longer statute-barred.
If you think a credit card debt might be statute-barred, get advice before responding to any letters or calls.
Can You Negotiate Credit Card Debt?#
Yes. Card companies would rather receive something than nothing.
You can try negotiating:
- Reduced balance: Offer a lump sum (e.g., 50-70% of the total) to settle the debt in full
- Reduced payments: Ask for lower monthly payments based on what you can afford
- Frozen interest: Request they stop adding interest while you repay the balance
Card companies are more likely to negotiate if:
- Your account is already in default
- You have a genuine reason for financial hardship (job loss, illness, divorce)
- You can offer a realistic repayment plan
Get everything in writing before you pay anything.
Should You Use a Debt Management Company?#
Be careful. Some debt management companies charge high fees (setup fees + monthly fees) that eat into your payments.
Always use free debt charities instead:
- StepChange
- National Debtline
- Christians Against Poverty
- Citizens Advice
These organisations offer the same services (DMPs, budgeting advice, negotiations with creditors) but charge nothing. All your payment goes toward reducing your debt.
Avoid companies that cold-call you or promise to “write off 70% of your debt” — these are often misleading.
If you’re struggling with debt and want to find out what options are available, use our free IVA calculator to see if you qualify and how much debt you could write off. It takes 2 minutes and won’t affect your credit score.
Frequently Asked Questions#
Can I keep one credit card if I enter an IVA?#
No. All credit cards must be included in the IVA. You can’t pick and choose which creditors to include. Once your IVA starts, your cards will be cancelled.
What if I can’t afford minimum payments?#
Contact your card company immediately. They might reduce your payments, freeze interest, or offer a payment holiday. Don’t ignore it — the debt will only get worse.
Will credit card debt affect my mortgage application?#
Yes. Credit card debt (especially if you’re near your credit limit) affects your debt-to-income ratio, which lenders use to assess mortgage affordability. Missed payments or defaults make it much harder to get approved.
Can bailiffs take my stuff for credit card debt?#
Not unless the creditor gets a CCJ and then applies for bailiff enforcement. Credit card debt alone doesn’t give creditors the right to send bailiffs. But if you ignore court action, bailiffs can be instructed.
Should I use my savings to pay off credit cards?#
It depends. If you have an emergency fund, keep at least 3 months’ expenses saved. But if you have significant savings earning 2% interest while paying 22% on credit cards, it makes financial sense to use some savings to clear the debt.
Can I get another credit card after an IVA?#
Not during the IVA (you can’t take on new credit over £500 without permission). After your IVA ends and it drops off your credit file (6 years), you can apply for credit cards again. Start with credit-builder cards to rebuild your score.
If you’re struggling with credit card debt and want to find out what options are available, use our free IVA calculator to see if you qualify and how much debt you could write off. It takes 2 minutes and won’t affect your credit score.