Overdraft customers will be able to ask for another three-month interest-free buffer of up to £500 under Financial Conduct Authority (FCA) plans.
The FCA also said that for customers yet to ask for an arranged interest-free overdraft of up to £500, the time period to apply would be extended until October 31 under its plans.
Customers who are negatively affected by coronavirus and who already have an arranged overdraft on their main personal current account would be able to request up to £500 interest-free for a further three months.
Richard Lane, director of policy and external affairs at StepChange, said: “The extension of payment holidays for credit cards, overdrafts and other forms of consumer credit will come as a huge relief for the many thousands of households struggling to keep up with credit repayments during this pandemic.
“But unless further long-term support measures are put in place, this relief will be short-lived.
“Our own research has found that 4.2 million people have borrowed to make ends meet since lockdown began, storing up a tsunami of £6 billion of debt that is set to worsen if left unchecked.
“With many households wondering how they will catch up with deferred payments, the FCA must not let payment holidays end with a cliff edge to debt.”
