Persistent debt advice please?

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I have one credit card.
It has 2.5K debt on it.
I don't use it and just pay off the interest each month.
The capital is not going down (last year I paid £500 interest alone)

I am a disabled single parent carer to two disabled kids and live on benefits but I accept that of course its my responsiblity to manage it and I have got into a mess re this long term debt (nearly 3 years now)

I called the provider (Tesco) to ask if my interest rate could be lowered but they said No. Under the new regs, I can either pay £600 by March and keep the card but still pay the same interest so still have the same issues with the remaining £1900.
OR they can 'pass me to the persistent debt team' who - may - only 'may' - they wont discuss it at this stage - look at reducing the interest over 4 years but it will affect my credit rating (i have never missed a payment) and the card will be stopped for at least 4 years.

I'd like to pay the £600 (very very hard, but I do owe the £) and reduce the interest on the rest but they won't discuss this, apparently I have to jump one way or the other at this point.

Can anyone advise which would be wiser as I feel unconfident about the decision? (please dont flame me, I feel bad as it is to be in debt)

Would it be possible for you to apply for another 0% credit card and balance transfer it?

You’d have to pay a fee (usually about 3% of the balance) but all of your payments will go towards the debt and not interest.

If you try this make sure you can transfer - if the Tesco card is MasterCard you’ll need to get a visa credit card. Then close down the Tesco card.

Do you own or rent your property?

If you do not have any assets like a house or a car (a mobility car if you have one is fine as you don't own it, and you would obviously need it) and have £50 pm or less in disposable income, a debt relief order might be appropriate. If you qualify, all your debt would be written off after a year, for a £90 fee.

Whether you go for a DRO or under the persistent debt team, it will trash your credit rating, but I'd I'd not worry so much about that, as you can't afford to borrow money anyway . But you'll be freed from the trap of paying loads of money towards a debt that's not going away.

Best thing to do is probably post your budget on the MSE debt relief advice board and they'll help you tweak it so it is most realistic - many people on low incomes spend less than is sustainable/allowed on groceries and household items while trying to pay their debts for example.

Sorry forgot the MSE link

I agree with pp. if you are unable to make further cuts to your spending therefore cannot pay off the cctv quicker, I'd go down the route suggested by the cc team. It would be no bad thing for you to not be able to get credit for the short term as you can't afford what you've already got.

Before you trash your credit rating (which should be ok at the moment if you are making payments of at least the minimum amount) definitely look to apply for a 0% credit card and do a balance transfer. Sounds like you could pay it off quite quickly if it wasn't for the interest? Cut the card up as soon as you've done it though, to avoid piling on more debt.

Thank you all for the advice.

Yes, if the interest was zero, I would have cleared the debt over the last nearly 3 years as I have spent nothing on it at all in that time (already cut up!). The debt became a problem when i had to stop work to care for my children

I do have an 'interest in a property' (going through a divorce with exH0 but it will be very low (mostly mortgage debt, house on market for last 18m, remote part of scotland). My car cost me £500, 18m ago but it sounds like I might not qualify for the money to be 'written off'.

The Tesco person said that the persistent debt agreement would not trash my credit rating (which is okay atm) but I didnt believe them :(

I would rather avoid this if possible, though I wont be running up any more debt - I can live within my mean atm but need to clear this debt. My annual statement from them doesnt even show the interest rate so I dont knwo what I'm paying - the person on the call said I'd have speak to the persistent debt team for that and that menat commiting myself to that option - aaargh.

I think the official 'persistent debt' thing is a new thing for credit cards, but I would expect that it will be somehow recorded on your credit history, maybe as an arrangement to pay, and it probably would affect your ability to get credit as a lender would not want you to be able to borrow money you can't pay back.

Also, they shouldn't do that as part of their responsible lending requirements.

They have to tell you your interest rate. That information can't be refused. Check one of your monthly statements. They information should be there.