Many people have applied for a payment holiday on their credit cards due to the COVID-19 pandemic, However, the question a lot of people are asking is what happens when it comes to an end?
Once the holiday period has ended the payments will automatically start again – it is important to know what dates your repayments will start. Any interest accrued over this period in time will be added to your outstanding balance. This in turn will mean your monthly minimum payments on your statement will increase. Your lender will inform you of this on your statement.
As long as you can make the payments you will not be required to do anything, If you are going to struggle to make the payments then it is important you take action now.
If you believe you are going to struggle to keep up with payments on your credit card when the holiday period ends it’s important to seek professional advice. You can call Debt Support Trust on 0800 085 0226 and we will be happy to advise you on the most suitable options available.
Dealing With Credit Card Payment Holidays Ending
In the first instance if you are struggling to make payments to your credit card you should review your budget, assess what is coming into the household (income) and what is going out (expenditure). Check if you can make cuts to any of your household bills – gas, electricity etc – comparison websites can be very useful for doing this. It is also worth remembering that if you have been made redundant then you may be entitled to a council tax reduction.
It is also worth speaking to your credit card lender, they may be able to extend the holiday period. You have until the 31st October to apply for a holiday payment. They may also be able to change your payment date if this would make it easier to repay. Some lenders will reduce your rate of interest, although you will still have to be able to make the minimum repayment.
If you are unable to make the repayments or have multiple lenders and are unable to negotiate with them all, we would recommend that you seek debt advice. This allows you to know what options are available to you and what the pros and cons are. There are many different debt solutions available and you may be suitable for more than one. Always seek advice from an independent debt advice charity, look in to all debt solutions and consider your options carefully before making any choices. If you do enter a debt solution it’s important to be aware that your credit rating will be affected for six years and obtaining credit within that period of time will be extremely difficult.