The Financial Conduct Authority (FCA) of the UK has extended a temporary moratorium on credit card payments for customers facing difficulties due to the Covid-19 pandemic.
The financial regulator has announced certain measures which outline the options financial institutions can provide its customers.
These options will support the credit card, store card, catalogue credit and personal loan customers and those who have availed up to £500 interest-free overdraft.
FCA interim CEO Christopher Woolard said: “For those who are now in a position to restart payments, it will be in their best interests to do so.
“But for those who still need it, the package we are confirming today ensures there is help and further support.”
FCA confirmed that firms can contact their customers at the end of their first payment freeze and discuss repayment plans if they missed their payments.
For those still facing financial difficulties, companies will further freeze or reduce payments on their credit card and personal loans for up to three months.
Customers, who already availed the overdrafts facility previously, can request up to £500 interest-free for a further three months, at lower costs.
Other customers facing financial problems during the pandemic can request a payment freeze or an interest-free overdraft of up to £500 until October end.
FCA added that any full or partial payment freezes will not affect the credit scores of the cardholders.
This guidance will be effective from 3 July 2020 and applies only to the credit card, personal loans and overdraft customers.