Credit card freeze extended for six weeks in advance of new lockdown.
Payment holidays on credit cards, car finance, personal loans and pawned items have been extended in advance of tougher coronavirus restrictions.
The Financial Conduct Authority (FCA) said customers which had not even deferred a transaction can now ask for one for up to 6 months.
Those with short-term recognition like payday loans can defer for one month.
“It is crucial that consumer credit clients who can pay for to do therefore continue to make repayments,” it said.
“Borrowers should only take up this assistance if they need it.”
It comes after the federal government announced a nationwide lockdown for England starting on Thursday, which will force all non essential retailers to close.
Mortgage holidays extended for up to six months
Next England lockdown’ a devastating blow’ The FCA had already brought in payment holidays for credit customers in April, extending them for three months in July.
however, it has now assessed the rules – which apply across the UK – amid anxieties tougher restrictions will hit much more people’s funds. The payment holidays will also 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
Furthermore, anyone probably benefitting from a transaction deferral is going to be ready to apply for a second deferral.
Nonetheless, the FCA would not comment on if individuals could really have interest on the initial £500 of their overdrafts waived. It said it will make a fuller statement in course that is due.
“We is going to work with trade bodies as well as lenders regarding how to implement these proposals as quickly as you possibly can, and often will make another announcement shortly,” the FCA said of the transaction deferrals.
In the meantime, it said customers should not contact lenders who’ll offer info “soon” on how to apply for the support.
It advised anybody still experiencing payment difficulties to speak to the lender of theirs to agree “tailored support”.
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Analysis box by Kevin Peachey, Personal finance correspondent The extension of fee holidays will be a relief to a lot of people already in lockdown and facing a decline in income, and those just about to get back to restrictions.
however, the theme running through this FCA statement is the fact that a debt issue delayed is not much of a debt problem resolved.
The financial watchdog is stressing that deferrals shouldn’t be used unless they’re actually necessary, and that “tailored support” could be a better choice for many people.
Folks that believe they’ll only have a short-term squeeze on their finances will observe developments keenly and hope for an extension to interest free overdrafts.
Importantly, banks and other lenders have a duty to determine any individual who is vulnerable and make sure they’re supported. As this crisis intensifies, the amount of individuals falling into that group is likely to grow.