Credit cards could get suspended this month because of new rules implemented by the Financial Conduct Authority (FCA). 

In September 2018, credit card providers began informing several clients that their cards may be frozen this February 2020. These are users who only made minimum repayments on their accounts for the last 18 months. The FCA considers them as credit cardholders in persistent debt. 

This may come as a surprise for some people to hear. If you are someone who pays the minimum repayment each month, aren't you fulfilling your responsibilities? 

The FCA doesn't think so. It has laid down in the new rules that if the repayments only cover interest fees but not the actual payment due, you are in persistent debt. 

Letters of Warning were sent out in 2018, informing borrowers in persistent debt for 18 months to increase the amount they are paying. Some lenders have offered loans with much lower interest rates to help cardholders.

This action by the FCA may be seen as too harsh. But the organization's goal is to help almost four million Brits to get out of a lifetime of debt. They've pointed out that some customers pay around $2.50 in interest fees for the actual $1 debt. This is why it can take decades for one person to clear their balance. 

Those who have ignored or not done anything about the recommendations of their credit card companies will find their accounts suspended this month. Some customers are fearful that credit card companies may abuse this rule and easily cancel anyone's account. 

Thus, the FCA issued a warning to lenders, reminding them that the goal is to reduce a customer's debt. Jonathan Davidson, Executive Director at the FCA, said: "If a customer cannot afford the firm’s proposals for how to do this the firm must offer forbearance, potentially including reducing, waiving or canceling any interest, fees or charges.”

The FCA's move to release people from the debt cycle may be found too restrictive for many. But there are simple, achievable ways that you can do to cut the cost of your debt.

1. Plan and live by a budget: keep track of your income and prioritize your bills and necessities. Plan in advance what you want to spend on or save for. When there is money available, set them aside for those things. In this way, you can determine what your frivolous expenses are. 

2. Prioritize your debts: There's no shame in having debts, but having several debts need proper management. If you can't pay them all at once, decide which one is most important. It's best to look at which debt has higher interest rates or charges.

3. Pay off your most expensive credit card first: Again, check the card that has the highest interest rate.

4. Pay off more than the minimum: Aim to pay off more than the minimum amount due on your credit card. This will bring down your bill quicker and get you out of the persistent debt category.

5. Know your bank balance: Check your bank balance regularly. Knowing how much you’re spending and how much you’re saving is a sure way to motivate your financial health. 

In the same way that your physical health needs a doctor, your financial health also needs a professional. Seek guidance from experts that can help you get out of debt.