Credit card freeze extended for 6 weeks ahead of new lockdown.
Payment holidays on credit cards, automobile finance, private loans and pawned goods have been extended in advance of tougher coronavirus restrictions.
The Financial Conduct Authority (FCA) said customers which had not even deferred a payment can now request one for up to 6 months.
Those with short-term credit such as payday loans are able to defer for one month.
“It is crucial that customer credit shoppers who are able to find the money to do so continue to make repayments,” it said.
“Borrowers should only take up the support if they need it.”
It comes after the governing administration announced a nationwide lockdown for England beginning on Thursday, which is going to force all non essential retailers to close.
Mortgage holidays given for as much as 6 months
Second England lockdown’ a devastating blow’ The FCA had previously brought in payment holidays for credit clients in April, extending them for 3 weeks in July.
But it’s today assessed the rules – which apply throughout the UK – amid fears tougher restrictions will hit much more people’s finances. The payment holidays will likely apply to those with rent to own and buy-now pay-later deals, it said. Read the following credit cards features:
- Home Depot Credit Card
- Apple Credit Card
- Walmart Money Card
- Wells Fargo Propel
- Travel Credit Card
- Petal Credit Card
- Amazon Credit Card
- Credit One Credit Card
- First Premier Credit Card
- Fortiva Credit Card
- Indigo Credit card
- Discover it Cash Back
Moreover, anyone already benefitting from a payment deferral will be in a position to apply for a second deferral.
Nonetheless, the FCA wouldn’t comment on if folks might still have interest on the initial £500 of their overdrafts waived. It said it will make a fuller statement in course which is due.
“We will work with trade bodies as well as lenders on how to implement these proposals as quickly as you possibly can, and will make an additional announcement shortly,” the FCA said of the transaction deferrals.
In the meantime, it said customers should not contact lenders who will give information “soon” on how to apply for the assistance.
It advised anybody still encountering transaction difficulties to speak to the lender of theirs to agree “tailored support”.
Presentational grey line
Analysis box by Kevin Peachey, Personal finance correspondent The extension of charge holidays will be a help to lots of men and women already in lockdown and dealing with a fall in earnings, and those just about to get back to restrictions.
however, the theme running through this FCA statement is that a debt issue delayed is not really a debt problem solved.
The financial watchdog is stressing that deferrals shouldn’t be used unless they are really necessary, and this “tailored support” may be a better choice for many people.
Folks that feel they’ll just have a short term squeeze on the finances of theirs will pay attention to developments keenly and hope for an extension to interest-free overdrafts.
Importantly, banks and other lenders have a duty to recognize any person who’s vulnerable and ensure that they are supported. As this crisis intensifies, the amount of people falling into that group is apt to grow.