How to get help with credit card payments during coronavirus
We’re on a mission to help everyone move on up to a better financial future, so we’ve put together this guide on what to do if you’re struggling with credit card payments during the coronavirus. It's updated on a regular basis, so you can have all the latest info in one place.
I can’t pay my credit card
The Financial Conduct Authority (FCA) has released new guidance so banks and lenders are able to give customers who are struggling a three month break from payments. You have until 31st October to ask for a payment holiday from your lender.
You should only take a three month break if you really need to. Interest will still be added so your payments afterwards will likely increase. If possible, making smaller payments is better, so you should do this if you can.
If you do need to apply for the payment break, contact your lender as soon as possible. Don’t cancel payments before speaking to the bank or lender. They are likely to be much busier than usual, so it may take a while to get a response.
If you were struggling with your finances before coronavirus, talk to your lender about this. Banks and lenders should consider other options for you, such as reducing or cancelling interest charges, or accepting smaller payments. Talk to them to find out what your options are.
You can find the application form for a payment holiday below. Click the name of the bank to go to their website. If your mortgage provider isn't listed, visit their website.
What happens when the payment holiday ends?
Your lender should contact you when your payment holiday is coming to an end. If you can afford to start making repayments after the three month holiday then you should do so.
If possible, it’s best to make some repayments, even if it is not the full amount. Talk about your repayment options when the lender contacts you.
But, if you are still struggling and can’t start making payments again, the Financial Conduct Authority has announced that customers can ask their bank to extend their payment holiday for another three months.
If I don’t pay my credit card, will it harm my credit score?
If you have an agreement with your lender, such as a repayment holiday or reduced payments, it won’t affect your credit score. This includes if you ask for another three month payment holiday.
If you miss a payment without an agreement in place, it will be treated as a missed payment and could harm your score.
You can see if your payment holiday has been recorded by the lender by checking your free credit report. If it shows a missed payment, you can raise a dispute on your report to get it sorted. You should also double-check with your lender, to make sure it doesn’t happen again next month.
It’s best to check your report on a regular basis, as it may take a while to update.
If you make sure everything is as it should be now, it'll make it easier when things go back to normal. With a good credit score, you can get the credit you need when you need it, improve your financial footing, and move on up to a better future.
I need a bigger credit limit
Some lenders are offering credit limit increases to help people through this difficult time. Get in touch with your credit card provider to see if they can give you one. Make sure you only borrow what you can afford to repay.
What if it’s a new credit card?
If you recently applied for a credit card and were approved, but are now struggling with paying the balance because of coronavirus, you should still be able to get the payment holiday.
If you are in this situation, contact your bank or lender as soon as possible.
I need a credit card
A good option right now might be a purchase card. Purchase cards give you a set number of months of interest-free spending, which means you won’t pay interest on anything you buy.
Before you apply, it’s best to check your eligibility, to see how likely you are to be accepted. Then you can apply for a card you’re most likely to get and avoid being rejected.
If you’re not eligible for a purchase card, you might be eligible for other credit cards to help you spread your costs over the next few months.
Think carefully before applying for credit, choose the right product for your situation and keep up your repayments, otherwise the offer could be taken away.
Keep in mind, some lenders are being cautious with lending right now. If you see something that’s suitable for you, it might be a good idea to see where you stand now, in case things change.
I’m paying too much interest on my credit card balance
If you’re paying interest on your credit card, you could move the balance to an interest-free balance transfer card.
A balance transfer lets you move your balance to another card where you don’t have to pay interest on it for a certain time. Always check your eligibility first, so you can go for something you’re likely to get accepted for.
You’ll start paying interest on any leftover balance once the balance transfer offer ends, so it’s a good idea to try and clear it by this time. And, make sure you keep up with all your repayments, otherwise the offer could be taken away.
Some lenders are withdrawing their offers at the moment, which means you could see less options than before. Now’s a good time to check and apply if you need to.
If you’re not eligible for a balance transfer card, get in touch with your lender and talk through your options.
I’m worried about getting into debt
Debt charity Stepchange offers free help and advice to those struggling. They can guide you through sensitive matters, and have a host of information on their website about debt and coronavirus.
Their phone lines are still open but there are less staff working, so bear this in mind when calling.
Visit the Stepchange website
Citizens Advice is also available to give free and confidential advice. They cover a range of issues, including debt. As well as guides and information online, you can talk to someone online and over the phone, though this may take longer than usual at the moment.
Visit the Citizens Advice website