How should I be using my credit card in these uncertain times?
THE coronavirus pandemic is having a devastating impact on the nation’s finances, but help is out there.
Many people have seen their income plummet after losing their jobs or having their wages cut while on furlough.
Thankfully, the government and financial watchdog have agreed emergency measures with banks to help ease the pressure on households.
We take you through everything you need to know about managing your credit card during the coronavirus crisis.
Can I take a payment holiday from my credit card?
If you cannot pay your bills because of the impact of covid-19 on your finances, you can request a break from your credit card payments for up to three months.
However, it’s vital that you don’t just cancel your direct debit without speaking to your provider first – you must wait for them to pause your repayments once the break is agreed.
Interest may continue to roll up during this time, which may cost more in the long run.
This means you should only request a freeze on payments if you really need one.
Most banks will allow you to do this via an online form, as helplines are extremely busy.
Will a payment holiday damage my credit score?
So long as your card company agrees to the payment holiday, it will not harm your credit score.
But if you just miss a payment without warning and without agreeing a payment holiday it can seriously hinder your chances of borrowing at a good rate in the future.
What is the contactless limit on credit cards?
The limit for making contactless card payments has been increased from £30 to £45. This is to help shoppers make more cashless transactions and reduce the need for customers to key in their pin numbers on payment terminals.
What’s the best way to contact my credit card company?
Call waiting times can be lengthy as so many customers are requesting help and banks are suffering from staff shortages.
Wherever possible, see if you can find the answer to your question online, by using your bank’s webchat service or via secure messaging from within its smartphone app, if available.
Can I still get a new credit card delivered?
You should still receive your new credit card ahead of its expiry date and if your card has been lost or stolen you can request a replacement as normal
Most card providers will allow you to block a lost or stolen card and request a new one online, so this should be your first port of call.
It may take slightly longer than normal due to staff shortages and a reduced postal service.
Don’t forget to check online with your provider how to activate your new card. Some cards require you to make a chip and pin transaction before you can use contactless.
What is section 75?
Despite government support, the covid crisis is likely to see many shops, travel companies and other businesses go bust, leaving customers out of pocket.
Meanwhile, scammers are taking advantage of the current situation to flog fake protective gear or finding other ways to part you from your cash.
But paying by credit card affords you special protection under what’s known as “Section 75” rules.
These mean that your credit card company is equally liable alongside the retailer if the item you buy isn’t delivered or does not match its description.
The protection only applies to purchases over £100 and up to £30,000.
So whether your post-lockdown plans include booking a holiday or installing a new kitchen, make sure you pay by credit card for maximum protection.
What happens if I can’t pay my credit card bill because of coronavirus?
Speak to your credit card provider as soon as possible.
You could ask for a payment holiday or they may offer you alternative help.
Don’t forget to check whether you are entitled to government support.
Visit www.gov.uk/coronavirus for more information or check www.turn2us.org.uk to see what benefits or grants you might be able to claim.
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