The vacation and credit card payment short are massively extended under the new rules

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Banks and building societies will be forced to let you skip payments on credit cards and extend overdrafts to 0% until October according to the new rules established by the regulator.

Persons who have not yet requested a freezing of payments or an overdraft without interest of up to 500 £ will be able to do so until 31 October 2020 in the framework of the plans.

Those who have already used one of the leave payment and who still face difficulties in payment because of the coronavirus will retain the support for three additional months.

The chief executive officer of the FCA, Christopher Woolard, said: “The proposals we have announced today would provide a minimum level of financial support expected to consumers who remain or are in temporary financial difficulties due to the coronavirus.

“When consumers can afford to make payments, it is in their long term interest to do so, but for those who need help, it will be there. ”

The banks have up to 17 hours on Monday to respond to the proposals, which are expected to become firm rules very shortly after.



The aid will remain in place until November, according to the new rules

Currently, you have the right to leave of three months on mortgages, cards and loans if you are having financial difficulties due to a coronavirus.

The mortgage assistance has been extended until October – with the option of a partial leave added – and now using for credit cards and overdrafts should correspond to this extension.

But Martin Lewis has warned the people to use them carefully in April after their launch.

“The least worst of is a leave of the mortgage payment,” said Martin.

“All the other credit cards, automobile financing, you really want to avoid them if you can. ”

His main concern is that, even if the payments stop, interest will continue to accumulate, which means that you will get lower payments after the end of the holiday.

The mortgage loans are the least bad because the debt is spread out over a long period of time, the increase in payments is expected to be low.

But leave payment is certainly preferable to a default on an invoice or a reduction in food or heating.

His last advice was not to apply if you can, because there is no rush to get them.

“Don’t make it unless you really need them,” he said.



Martin Lewis was told to be cautious when applying for one of these

The changes occur so that people who had frozen their payments due to the financial impact of Covid-19 should end.

In response, the new rules of the FCA provide:

  • At the end of a freezing of the payments, businesses should contact their clients to know if they can take over the payments – and if so, agree a plan on how the missed payments could be reimbursed. If the customer can afford to return to the normal repayment schedule, it is in their interest to do so.
  • Anyone who continues to be in need of assistance gets help – for customers who still face difficulties in payment is temporary due to a coronavirus, the companies should provide support in reducing the payments on their credit card and their personal loans to a level that they can afford for 3 months.
  • Client support short – allowing customers who are affected by the coronavirus and that have already discovered a organized on their current account, principal staff, to apply for up to £ 500 interest-free for 3 more months, and to provide additional assistance in the form of lower interest rates on loans above the cushion without interest and repayment plans for those who would benefit from it.
  • Extend the period during which the program is available for persons who may be affected at a later date – customers who have not yet had a freeze of payments or an overdraft interest-free arranged up to £ 500 and who are experiencing temporary financial difficulties, due to a coronavirus, be able to apply until 31 October 2020.
  • When a customer has need for temporary assistance additional to overcome the crisis, the freezing of payments and / or freezing of part of the payments proposed in the framework of these guidelines should not have a negative impact on credit records. However, consumers should remember that credit records are not the only source of information that lenders can use to assess the solvency.

Richard Lane, of StepChange, a charity for debt, said: “The extension of the leave, payment for credit cards, overdrafts and other forms of consumer credit will be a huge relief for the thousands of households that struggle to keep up with the loan repayments during this pandemic.”

But he also had a warning.

“Unless new measures of long-term support are in place, this relief will be short-term,” added Lane.

“While many households are wondering how they creep up on their deferred payments, the FCA must not allow the suspension of payment will end at the edge of the debt. Remove the help to those who need more time to recover risk exposing them to financial difficulties avoidable in the long term. ”

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