Credit card freeze given for 6 weeks ahead of new lockdown.
Payment holidays on credit cards, automobile finance, personal loans and pawned goods have been extended in front of tougher coronavirus restrictions.
The Financial Conduct Authority (FCA) said customers which had not yet deferred a transaction can today request one for up to 6 months.
Those with short-term recognition such as payday loans can defer for one month.
“It is crucial that consumer credit clients who can find the money to do so continue to make repayments,” it stated.
“Borrowers need take no more than up this support if they need it.”
It comes after the government announced a nationwide lockdown for England beginning on Thursday, which is going to force all non-essential retailers to close.
Mortgage holidays provided for up to 6 months
Second England lockdown’ a devastating blow’ The FCA had previously brought in fee holidays for credit clients in April, extending them for 3 weeks in July.
however, it has now reviewed the rules – which apply throughout the UK – amid fears tougher restrictions will hit much more people’s finances. The transaction holidays will 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
Additionally, anyone probably benefitting from a payment deferral will be able to apply for a second deferral.
But, the FCA would not comment on if men and women might still have interest on the very first £500 of their overdrafts waived. It said it will come up with a fuller statement in due course.
“We will work with trade bodies as well as lenders regarding how to employ these proposals as quickly as is possible, and can make an additional announcement shortly,” the FCA said of the payment deferrals.
In the meantime, it said customers shouldn’t contact lenders who will provide info “soon” on how to apply for the support.
It advised anyone still encountering transaction difficulties to speak to their lender to agree “tailored support”.
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Analysis box by Kevin Peachey, Personal finance correspondent The extension of payment holidays will be a help to many men and women already in lockdown and dealing with a drop in income, and those just about to return to restrictions.
however, the theme running through this FCA statement is the fact that a debt problem delayed is not really a debt problem solved.
The financial watchdog is worrying that deferrals shouldn’t be used unless they’re truly necessary, and this “tailored support” could be a much better option for many people.
People who believe they will only have a short term squeeze on their finances will watch developments keenly & wish for an extension to interest-free overdrafts.
Importantly, other lenders and banks have a duty to recognize anyone who’s insecure and ensure that they are supported. As this crisis intensifies, the number of people falling into that group is actually apt to grow.