Credit card freeze extended for six weeks in advance of new lockdown.
Payment holidays on credit cards, automobile finance, private loans and pawned goods have been extended in front of tougher coronavirus restrictions.
The Financial Conduct Authority (FCA) said shoppers who had not even deferred a payment can today ask for one for up to six months.
Those with short term credit like payday loans can defer for one month.
“It is crucial that consumer credit clients who are able to find the money to do therefore continue to make repayments,” it said.
“Borrowers need not take more than up this support if they require it.”
It comes after the federal government announced a nationwide lockdown for England beginning on Thursday, which will force all non essential retailers to close.
Mortgage holidays given for as much as six months
Second England lockdown’ a devastating blow’ The FCA had previously brought in fee holidays for recognition customers in April, extending them for three weeks in July.
Though it has today reviewed the rules – which apply throughout the UK – amid fears tougher restrictions will hit much more people’s finances. The transaction holidays will also apply to those with rent to own and buy-now pay-later deals, it stated. 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
Furthermore, anyone already benefitting from a transaction deferral is going to be able to apply for a second deferral.
Nonetheless, the FCA would not comment on whether individuals could still have interest on the initial £500 of their overdrafts waived. It said it will make a fuller statement in due course.
“We will work with trade bodies and lenders regarding how to employ these proposals as quickly as possible, and can make an additional announcement shortly,” the FCA said of the payment deferrals.
In the meantime, it said buyers shouldn’t contact lenders who will provide information “soon” regarding how to apply for the support.
It advised anyone still experiencing 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 relief to lots of people already in lockdown and dealing with a drop in income, and those just about to get back to restrictions.
although the theme running through this FCA statement is that a debt issue delayed is not much of a debt problem solved.
The financial watchdog is worrying that deferrals shouldn’t be used unless they’re really needed, and this “tailored support” might be a much better option for many people.
Men and women who feel they’ll end up with a short term squeeze on the finances of theirs will watch developments keenly & hope for an extension to interest-free overdrafts.
Importantly, other lenders and banks have a duty to identify any individual who’s insecure and ensure that they’re supported. As this crisis intensifies, the number of individuals falling into that group is likely to grow.