Britain’s markets watchdog on Friday proposed enabling consumers to extend a payment freeze on their credit cards by a further three months, as part of measures to support borrowers in difficulties due to the coronavirus pandemic.
Those who had not yet asked for a payment freeze on credit cards or for an interest-free overdraft of up to 500 pounds ($620) could also seek one up until Oct 31, the Financial Conduct Authority said in a statement.
The extension to the payment holiday, which was introduced in April, would also enable customers to ask for a reduced interest rate on any overdraft borrowing above 500 pounds.
“The proposals…would provide an expected minimum level of financial support for consumers who remain in, or enter, temporary financial difficulty due to coronavirus,” Christopher Woolard, the FCA’s interim CEO said.
“Where consumers can afford to make payments, it is in their best long-term interest to do so, but for those who need help, it will be there.”
Guidance for other forms of borrowing such as auto finance, pawnbroking and payday loans would be updated soon, the FCA said.
The watchdog is seeking comments on the guidance until 5pm on June 22 and expects to finalise it shortly after.