A woman carrying shopping bags on her arm and holding four store cards, demonstrating store card debt

Store Card Debt Help

Getting 10% off at the checkout by opening a store card might seem like a bargain at the time, but high interest rates – often exceeding 30% APR – mean that the discount disappears fast. What started as a way to save money becomes expensive debt that’s difficult to clear.

At NDH Financial, we’re personal insolvency specialists, with our own in-house licensed Insolvency Practitioner. We understand how store card debt builds up, and we’re here to help you find solutions that give you legal protection whilst you get your finances back on track.

If you’re struggling with store card debt, an Individual Voluntary Arrangement (IVA) could stop all creditor contact and freeze the interest, letting you repay what you can genuinely afford over 5-6 years. After that, any remaining qualifying debt is written off**.

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What is Store Card Debt?

Store card debt is money you owe on a credit card that can only be used at a specific retailer. These cards let you spread the cost of purchases over monthly payments, but they come with a catch: interest rates typically range from 20% to 30% APR, significantly higher than most standard credit cards.

When you use a store card, you’re borrowing money from the retailer. Unless you pay the full balance each month, interest builds up on what you owe. Even if you make the minimum payment, most of it goes toward interest rather than reducing your actual debt, so your balance decreases very slowly. Each bill you receive shows how little progress you’re making when only paying the minimum.

Store card debt is classified as unsecured debt, meaning it’s not secured against any of your assets. This makes it a non-priority debt – the retailer can’t repossess items you’ve bought if you fall behind on payments, but they can take other actions to recover what you owe.

What Is Persistent Debt?

If you’ve paid more in interest and fees than you’ve reduced your actual balance over 18 months, your store card provider will contact you about your persistent debt. This happens when you’re only making minimum payments each month, as most of those payments will cover interest rather than reducing what you owe.

Since September 2018, the Financial Conduct Authority has required all lenders to contact customers in persistent debt. Receiving this letter doesn’t mean you’ve done anything wrong – it’s a regulatory requirement designed to help people understand their situation.

The Persistent Debt Timeline

After 18 months: You’ll receive your first persistent debt letter encouraging you to increase your payments or clear the balance.

After 27 months: If you’re still in persistent debt, you’ll be contacted again with stronger encouragement to pay off the debt.

After 36 months: If the debt still hasn’t been cleared, your card provider must offer you an affordable payment plan. If you don’t set up a plan, your account may be suspended, which will impact your credit file.

Persistent debt can also build up through credit card debt or catalogue debt – any revolving credit where you’re only making minimum payments.

Get in touch today

NDH Financial can help free you from the shackles of your debt.

Call us on 0800 002 9051 or apply below.

If you’re an existing client, please call us on 0800 002 9061.

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Debt Solutions

Causes of Store Card Debt

Store card debt builds up for various reasons, often starting with good intentions before becoming challenging to manage.

Easy Access and Tempting Offers

Retailers actively promote store cards at the checkout, offering instant discounts on your first purchase. This immediate saving can make opening an account feel like a smart financial decision, but the high interest rates quickly wipe out any initial benefit if you don’t clear the balance straight away.

High Interest Rates

Store cards charge some of the highest interest rates of any credit product, often between 25% and 35% APR. A £500 purchase can end up costing hundreds more if you only make minimum payments. The interest accumulates faster than many people realise, especially when you’re also adding new purchases to the card.

Multiple Store Cards

It’s common to have several store cards from different retailers. You might open one for a specific purchase, then another when shopping elsewhere, and before long, you’re juggling payments across multiple cards. Each has its own payment date, interest rate, and minimum payment, making it difficult to keep track of what you owe and to who. When combined with other debts, like a payday loan, these multiple debts can become overwhelming to manage.

Minimum Payments Trap

Store card minimum payments are deliberately set low – often just 2-3% of the balance or £5, whichever is higher. This makes them seem affordable, but at this rate, it can take decades to clear even modest balances, with most of each payment going towards interest.

Changes in Circumstances

Losing your job, work reducing your hours, illness, relationship breakdown, or unexpected expenses can all make store card payments suddenly unaffordable. What was manageable when you opened the account becomes another pressure you can’t meet.

Using Store Cards for Essentials

When money is tight, store cards can seem like a great solution for buying necessities like school uniforms, winter coats, or household items. Paying later provides immediate relief, but creates debt that must be repaid with high interest charges, often when money is already stretched. Constantly worrying about making payments can take a real toll on your mental health.

Will store card debt affect my credit score?

Yes. Store cards appear on your credit file just like any other form of credit, and how you manage them directly impacts your credit score.

If you pay on time every month and keep your balance reasonable, a store card can actually work in your favour – it shows lenders you can handle credit responsibly. The problems start when you’re struggling to keep up:

  • Missing payments gets recorded on your file, and each missed payment signals to lenders that you’re struggling financially
  • Defaults are registered after six months of non-payment and stay on your credit file for six years
  • Maxed-out limits show lenders you’re under financial pressure, even if you’re making minimum payments
  • Persistent debt demonstrates you’re stuck in a repayment cycle rather than clearing what you owe
  • County Court Judgments go on your file for six years if the store card company takes legal action

All of this negative information remains on your credit file for six years from the date of the problem, whether that’s a missed payment, a default, or a CCJ. During that time, you’ll find it difficult to access credit, and when you can, you’ll typically pay higher interest rates.

What happens if I don't pay a store credit card?

If you fall behind on store card payments, the retailer will typically follow these stages:

Reminder letters and calls – The company contacts you, asking you to catch up on missed payments

Default notice – A formal warning giving you at least 14 days to pay the arrears before further action

Default registered – After six months of non-payment, a default appears on your credit file

Debt collection agency – Your account may be passed to a store card debt collector or sold to a debt purchaser

County Court Judgment – The company may apply to court for a CCJ ordering you to pay

Bailiff action – If you don’t keep to a CCJ payment order, bailiffs may be instructed (they cannot force entry for store card debt)

Engaging with the store card company early is important. Ignoring letters and calls makes the situation worse, but honest communication about your circumstances can lead to a manageable repayment plan.

Can you write off store card debt?

Yes, it’s possible to write off store card debt through formal debt solutions. However, it won’t simply disappear on its own – you’ll need to take action.

If you haven’t made a payment or acknowledged the debt in writing for six years, it may become statute-barred. This means the store card company can no longer take you to court to recover it, though the debt itself doesn’t legally disappear, and they can still contact you about it.

Debt Solutions to Help with Store Card Debt

If you’re struggling with debt and dealing with money worries, several formal debt solutions can help you pay your debts and regain control of your finances.

Individual Voluntary Arrangement (IVA)

An IVA is a formal, legally binding agreement with your creditors that lets you combine all your debts into a single monthly payment over 5-6 years. Your Insolvency Practitioner arranges and manages the whole process. Once your IVA is approved:

  • Store card companies are legally prevented from chasing you for payment
  • All interest and charges stop building up immediately
  • Your monthly repayments are based on what you can genuinely afford
  • When you complete the arrangement, the remaining qualifying debt is written off**

An IVA might be suitable if you owe £7,000 or more in unsecured debt (store cards included), earn a regular income, and have enough left after essential costs to make monthly contributions.

Check if You Qualify for an IVA

Debt Relief Order (DRO)

A DRO works if you owe less than £50,000, own minimal assets (under £2,000), and have little disposable income once essentials are covered. Your store card debt gets frozen for 12 months, and if your circumstances haven’t improved by then, the debt is written off.

Applying for a DRO is now free in England and Wales, removing a barrier that previously stopped people from accessing this form of debt relief.

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Debt Management Plan (DMP)

A DMP lets you make smaller monthly payments to your creditors based on affordability. However, it’s informal – there’s no legal protection stopping store card companies from contacting you or adding interest. This option tends to work best when financial problems are temporary.

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Bankruptcy

Bankruptcy clears store card debt, typically within 12 months. But it’s a significant decision with lasting consequences – you may lose assets, and your credit rating takes a six-year hit. It should only be on the table when other routes won’t work.

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Breathing Space

The Breathing Space scheme provides 60 days of breathing room while you get proper debt advice. Store card companies must stop pursuing payment and can’t charge interest during this period, giving you protected time to work out which long-term solution best fits your situation, like an IVA.

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Struggling with store card debt? Contact NDH Financial Today

If store card debt is causing you stress, and you’re unsure how to move forward, NDH Financial can help. We’re personal insolvency specialists with our own licensed Insolvency Practitioner in-house, and we’ve helped people regain control of their finances.

Our debt consultants will assess your situation honestly and help you understand whether an IVA, or another debt solution, is right for your circumstances. We’ll help you create a realistic budget that accounts for your living costs, and show you the best way to tackle paying off your debts. We’ll explain everything clearly, with no pressure and no obligation to proceed.

Don’t let store card debt control your life. Contact us today for a confidential consultation.

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Have More Questions? Our IVA Learning Hub Can Help

We know you might have questions and that's fine. We can answer most of those on our call.

But we've also built our learning hub so that you can learn more about an IVA and see if one is right for you.

Click below to check it out.

IVA Learning Centre