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May 11, 2020

UK banks offer clients payment holidays on credit cards and loans

The UK Finance trade association has revealed that the banking and finance industry has provided financial relief to hundreds of thousands of Covid-19 impacted customers.

Nearly 700,000 customer accounts have been given a payment holiday on their credit cards and 470,000 on personal loans as of 30 April 2020.

The payment holidays were provided for virus-impacted customers without affecting their credit scores.

The lenders have collaborated with the Financial Conduct Authority (FCA) to offer these relief measures for up to three months.

Additionally, over 27 million customers are said to have received an interest-free borrowing on the first £500 of their overdrafts for up to three months.

During this period, any overdraft interest waived by lenders will not have to be repaid at a later date.

UK Finance CEO Stephen Jones said: “Payment holidays on loans and credit cards and interest-free overdrafts can provide much-needed support to those with short-term cash flow pressures, whether it’s to cover next week’s grocery shop or next month’s utility bill.

“We would encourage any customers concerned about their financial situation to check with their lender, starting by looking at their website which will have the latest information on the support available.”

Apart from this, the lenders also provided mortgage payment holidays, increased the contactless limit to £45 and raised awareness of scams through the Take Five to Stop Fraud campaign.

All these actions are part of a broad package of measures from the industry to support customers affected by the Covid-19 outbreak.

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