Make the most of the UK's holiday from debt

Loans and credit card payments may be frozen for three months, but you will still have to cut your borrowing.

Your car finance provider may be able to help © Alamy

If your income has been hit by the Covid-19 lockdown and you are worrying about making your debt repayments, don’t panic. The Financial Conduct Authority (FCA) has “announced plans to freeze loan and credit card payments for up to three months as part of emergency measures”, says Kalyeena Makortoff in The Guardian. If confirmed, the scheme would mean that you can apply to your loan or card provider for a break in your repayments that wouldn’t affect your credit rating, as with a mortgage holiday. Lenders would also have to waive interest charges on arranged overdrafts of up to £500 for the same period.

This will relieve pressure on many people facing an income shortfall, but the government isn’t waving a magic wand over your debt. When the crisis passes your debt will still be there. However, you can take steps of your own to tackle your debt. If you have credit cards you can’t afford to pay off, apply for an interest-free balance transfer credit card – but do it fast.

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Ruth Jackson-Kirby

Ruth Jackson-Kirby is a freelance personal finance journalist with 17 years’ experience, writing about everything from savings accounts and credit cards to pensions, property and pet insurance.

Ruth started her career at MoneyWeek after graduating with an MA from the University of St Andrews, and she continues to contribute regular articles to our personal finance section. After leaving MoneyWeek she went on to become deputy editor of Moneywise before becoming a freelance journalist.

Ruth writes regularly for national publications including The Sunday Times, The Times, The Mail on Sunday and Good Housekeeping, among many other titles both online and offline.