Credit card freeze given for six months in front of new lockdown.

Credit card freeze extended for 6 months ahead of new lockdown.

Payment holidays on credit cards, automobile finance, personal loans and pawned products have been extended ahead of tougher coronavirus restrictions.

The Financial Conduct Authority (FCA) said consumers which had not yet deferred a transaction 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 essential that consumer credit customers who could afford to do therefore continue making repayments,” it said.

“Borrowers must not take more than up the assistance if they need 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 extended for as much as six months
Second England lockdown’ a devastating blow’ The FCA had already brought in payment holidays for recognition customers in April, extending them for three weeks in July.

Though it’s nowadays assessed the rules – which apply across the UK – amid fears tougher restrictions will hit a lot more people’s funds. The transaction holidays will likely 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 payment deferral will be able to apply for a second deferral.

However, the FCA would not comment on whether folks can still have interest on the first £500 of their overdrafts waived. It said it will create a fuller statement in course which is due.

“We will work with trade systems and lenders regarding how to employ these proposals as quickly as is possible, and often will make an additional announcement shortly,” the FCA said of the payment deferrals.

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

It advised anybody still encountering 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 men and women already in lockdown and struggling with a drop in income, and those just about to return to restrictions.

Though the theme running through this FCA declaration is the fact that a debt problem delayed is not much of a debt problem resolved.

The monetary watchdog is worrying that deferrals shouldn’t be used unless they’re truly necessary, and that “tailored support” might be a better choice for lots of people.

Men and women which believe they will just have a short term squeeze on the finances of theirs will watch developments keenly and hope for an extension to interest free overdrafts.

Importantly, banks along with other lenders have a duty to determine any individual who is vulnerable and ensure that they’re supported. As this crisis intensifies, the number of people falling into that group is actually likely to grow.