Credit card freeze extended for six months ahead of new lockdown.

Credit card freeze given for six weeks in front of new lockdown.

Payment holidays on credit cards, car finance, personal loans and pawned products have been extended in advance of tougher coronavirus restrictions.

The Financial Conduct Authority (FCA) said clients which had not yet deferred a transaction can today ask for one for up to six months.

Those with short-term credit like payday loans are able to defer for one month.

“It is crucial that consumer credit customers who can afford to do so continue to make repayments,” it stated.

“Borrowers should not take more than up this assistance if they need to have it.”

It comes after the federal government announced a nationwide lockdown for England starting on Thursday, which is going to force all non essential retailers to close.

Mortgage holidays extended for as much as 6 months
Second England lockdown’ a devastating blow’ The FCA had previously brought in payment holidays for credit customers in April, extending them for 3 weeks in July.

Though it’s nowadays assessed the rules – which apply throughout the UK – amid fears tougher restrictions will hit many more people’s finances. The transaction holidays will even apply to those with rent to own as well as buy-now pay later deals, it said. Read the following credit cards features:

Additionally, anyone probably benefitting from a transaction deferral is going to be ready to apply for a second deferral.

However, the FCA would not comment on if individuals could really have interest on the initial £500 of their overdrafts waived. It said it would come up with a fuller statement in due course.

“We is going to work with trade systems and lenders on how to apply these proposals as quickly as is possible, and can make an additional announcement shortly,” the FCA said of the transaction deferrals.

In the meantime, it said clients shouldn’t contact lenders who will provide information “soon” regarding how to apply for the support.

It advised anyone still encountering payment difficulties to speak to the lender of theirs to agree “tailored support”.

On Saturday, the FCA also announced plans to extend payment holidays for mortgage borrowers.

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Analysis package by Kevin Peachey, Personal finance correspondent The extension of charge holidays will be a help to many individuals already in lockdown and struggling with a drop in earnings, and those just about to go back to restrictions.

But the theme running through this FCA declaration is the fact that a debt problem delayed is not a debt problem solved.

The financial watchdog is stressing that deferrals should not be used unless they’re really needed, and that “tailored support” may be a much better option for lots of people.

Men and women who believe they’ll just have a short-term squeeze on their funds will pay attention to developments keenly and hope for an extension to interest-free overdrafts.

Importantly, banks as well as other lenders have a duty to determine any person who’s vulnerable and make sure they’re supported. As this crisis intensifies, the number of people falling into that grouping is actually apt to grow.

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