Credit card freeze extended for six weeks in advance of new lockdown.
Payment holidays on credit cards, automobile finance, private loans and pawned items have been extended in advance of tougher coronavirus restrictions.
The Financial Conduct Authority (FCA) said consumers that had not yet deferred a transaction can right now ask for one for up to six months.
Those with short term credit like payday loans can defer for one month.
“It is important that consumer credit shoppers who are able to afford to do and so continue to make repayments,” it stated.
“Borrowers should only take up the assistance if they need to have it.”
It comes after the 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
Next England lockdown’ a devastating blow’ The FCA had previously brought in payment holidays for recognition customers in April, extending them for three weeks in July.
But it’s now assessed the rules – which apply across the UK – amid fears tougher restrictions will hit many more people’s finances. The payment holidays will likely 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
Additionally, anyone probably benefitting from a payment deferral is going to be able to apply for a second deferral.
However, the FCA would not comment on if folks can really have interest on the first £500 of their overdrafts waived. It said it will make a fuller statement in due course.
“We will work with trade systems and lenders on how to carry out these proposals as quickly as you possibly can, and can make another announcement shortly,” the FCA said of the transaction deferrals.
In the meantime, it said clients shouldn’t contact lenders who’ll offer information “soon” regarding how to apply for the support.
It advised anyone still encountering transaction difficulties to speak to the lender of theirs to agree “tailored support”.
Presentational grey line
Analysis package by Kevin Peachey, Personal finance correspondent The extension of charge holidays will be a help to lots of people already in lockdown and struggling with a fall in earnings, and those just about to go back to restrictions.
But 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 stressing that deferrals should not be used unless they are actually necessary, and this “tailored support” may be a much better choice for lots of people.
Men and women who believe they will end up with a short term squeeze on the finances of theirs will watch developments keenly & wish for an extension to interest-free overdrafts.
Importantly, banks and other lenders have a duty to identify any individual who is vulnerable and ensure that they’re supported. As this crisis intensifies, the amount of men and women falling into that grouping is actually likely to grow.