700,000 credit card payment 'holidays'

Nearly 700,000 people have been granted payment ‘holidays’ on their credit cards in stop-gap measures to support borrowers affected by the coronavirus crisis.

Lenders have also provided almost 470,000 payment freezes on personal loans, according to the figures for the period up to the end of April released by trade association UK Finance.

UK Loans say firms have also worked to ensure these steps will not harm customers' credit files – as taking a payment holiday will not be reported to credit reference agencies as the customer being in arrears.

Interest will normally continue to be charged during payment holidays - so customers taking this option may end up having to pay back more money over the long term.

Interest-free overdraft buffers of £500 have also been applied to more than 27 million personal current accounts - both in response to customers asking for it and buffers being put in place automatically.

Stephen Jones, chief executive of UK Finance, said: "Many people across the country are facing financial pressures due to coronavirus.

"Payment holidays on loans and credit cards and interest-free overdrafts can provide much-needed support to those with short-term cash flow pressures.

"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."

People indifficulty can also get fre help from the Money Advice Service, or speak to charity StepChange.