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

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

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

The Financial Conduct Authority (FCA) said shoppers which had not yet deferred a payment might right now request one for up to 6 months.

Those with short-term recognition such as payday loans are able to defer for one month.

“It is essential that customer credit buyers who could afford to do therefore continue making repayments,” it stated.

“Borrowers must not take more than up the assistance in case they need it.”

It comes after the government announced a nationwide lockdown for England starting on Thursday, which is going to 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 payment holidays for recognition customers in April, extending them for 3 months in July.

however, it has today reviewed the rules – which apply across the UK – amid fears tougher restrictions will hit much more people’s finances. The payment holidays will also apply to those with rent to own as well as buy now pay later deals, it stated. Read the following credit cards features:

Additionally, anyone already benefitting from a transaction deferral will be in a position to apply for a second deferral.

But, the FCA wouldn’t comment on if individuals can 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 will work with trade bodies and lenders regarding how to employ these proposals as quickly as you possibly can, and often will make another announcement shortly,” the FCA said of the payment deferrals.

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

It advised anyone still experiencing payment difficulties to talk 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 payment holidays will be a relief to lots of folks already in lockdown and facing a drop in earnings, and those just about to get back to restrictions.

however, the theme running through this FCA statement is the fact that a debt problem delayed is not really a debt problem resolved.

The monetary watchdog is stressing that deferrals shouldn’t be used unless they are actually needed, and this “tailored support” may be a much better option for a lot of people.

Individuals which feel they will only have a short term squeeze on their finances will watch developments keenly and wish for an extension to interest free overdrafts.

Importantly, banks along with other lenders have a duty to recognize anyone who’s insecure and make certain they are supported. As this crisis intensifies, the number of individuals falling into that group is apt to rise.

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