People said they would be allowed to stop making payments for three months and banks and construction companies were not allowed to put a black mark on their credit report to do so.
They proved popular – with 961,700 deferrals on credit cards and 688,900 deferrals on personal loans from banks.
But with the three-month period almost in place, and the coronavirus still wreaking havoc with the finance folks, a new set of rules was unveiled this morning.
On the surface, this is good news – the payment for the entire vacation to be extended until October 31 and partial news of the payment plans introduced as well, but financial expert Martin Lewis warned people to be very careful about taking their place.
“A vacation payment is when you don’t have to pay, but the interest is still high rack and you have to do it no later,” the founder MoneySavingExpert.com explained to people in a message video.
There is also a gap in the promise that it would not affect your credit rating.
“As always, this won’t go into your credit report – but you shouldn’t be sure it won’t affect your future credit worthiness,” said mr. Martin.
“By using open banking or studying your history of future payment lenders are able to right where you took a vacation payment – and it’s not against the rules, incorporate them when they are looking into your credit application, including mortgages. ”
But he added that it should hopefully only have a small impact.
“I don’t think if you just take the vacation payment standard and then move on, it’s going to have too much impact, but it could have an impact if you’re about to,” said mr. Martin.
However, caution is always advised as a result.
“If you combine that with the fact that all you do is defer the payment and the interest is shelving and the interest on these products can be very high if you are on a 0% deal, that is usually my rule is: “only do this if necessary, and if you can take a partial vacation payment is not a full vacation payment because you can afford to reimburse part, then do it. ”
He also pointed out that the new rules are currently only proposals with banks having until 5 a.m. on Monday to respond – but added that in the past they have almost always been enforced unchanged about 10 days after being ad.