More than a million credit card payment deferrals granted

More than a million payment deferrals have been provided on credit cards as lenders help borrowers whose finances have temporarily been hit by the impact of coronavirus.

Lenders have provided 1.05 million temporary payment holidays on credit cards and nearly 707,000 payment deferrals on personal loans, trade association UK Finance said.

More than 27 million accounts also have temporary interest-free £500 arranged overdraft buffers applied to them, if needed.

The support for consumer credit borrowers has been put in place by the banking and finance industry and Financial Conduct Authority (FCA) to help people facing temporary financial pressures due to the Covid-19 pandemic.

The help also includes granting 1.9 million mortgage payment deferrals, increasing the contactless limit to £45 and providing £46 billion of lending to more than 1.1 million businesses through government Covid-19 lending schemes.

On July 1 the FCA published guidance outlining the next steps for customers nearing the end of their credit support arrangement.

Customers who are able to return to making regular payments are encouraged to do so as soon as possible, as this will keep down the overall cost of borrowing.

For customers with longer-term financial difficulties, lenders are offering continued help and flexibility.

Customers who have been granted payment deferrals will be contacted by their credit card providers before the end of the three-month period to plan their next steps.

Depending on their circumstances, they may be offered full or partial payment deferrals or other arrangements to help support them.

Those customers who are yet to request a payment deferral or an arranged interest-free overdraft of up to £500 have until October 31 to apply for one.

Eric Leenders, managing director of personal finance, UK Finance, said: “Many borrowers facing financial pressures are taking up the measures being offered by lenders to help them get through this crisis.”

He continued: “Each customer will face a unique set of circumstances. But no matter what your situation, if you are facing temporary financial difficulties due to the coronavirus pandemic there will be support still available to help you through these challenging times.”