The financial regulator has announced plans to freeze loan and credit card payments for up to three months as part of emergency measures for consumers impacted by the coronavirus outbreak.

It is aimed at consumers and renters who are not benefiting from existing relief measures that have targeted homeowners – with mortgage payment holidays – or business owners.

The FCA said consumers who were at risk of having their credit cards suspended because of the regulator’s new affordability rules would not lose access to their accounts.

Lenders would also have to waive interest charges on arranged overdrafts up to £500 over the same period, which would extend relief already announced by some banks including Barclays, HSBC and Lloyds.

Consumers who dip into unauthorised overdrafts would also benefit. Most banks have started charging a single interest rate of 39.9% for both arranged and unauthorised overdrafts as part of new rules meant to standardise charges this month.

But the FCA’s emergency measures force firms to make sure all customers are “no worse off” due to the changes, meaning some customers may revert to lower interest rates.

Banks and credit card providers will have to ensure that consumer credit ratings are unaffected by any of the measures, the FCA said.

Source: Loan and credit card payments to be frozen for three months in UK