It’s a good idea to understand the options available to you when your payment holiday on your store card comes to an end, especially if you’re still going to struggle to make repayments.
What happens when your payment holiday is over?
Your store card provider will get in contact with you when you are coming to the end of a payment holiday (also called a payment freeze) to discuss your options.
It will be in your best interests to discuss next steps with your provider. If they don’t hear back from you they will restart your repayments automatically.
Under normal circumstances, any missed payments (including interest due) will be added to your outstanding balance, subject to any promotional period. This means your monthly minimum payments on your store card will go up.
Your store card provider will tell you how much your payments will be in your first statement after your payment freeze ends.
If you’re still going to struggle to make repayments after your payment freeze has ended, it’s important you get in touch with your store card provider as soon as possible.
You can ask for another payment holiday of up to three months, but this option is only available until 31 October 2020. There might be other options available to you.
Make sure you’ve claimed everything you’re entitled to
Make an emergency budget
If you’re worried about cashflow, have a look at what you’re spending and what income you have coming in.
Look at how to cut your household bills, such as switching providers for your gas, electricity or mobile phone contracts.
What options might your lender consider?
Changing your payment due date
If it will benefit you, your provider can change you payment due date. For example, to just after you get paid.
Reducing interest rates on your store card
Reducing the interest rate on your store card might make your repayments more manageable, or reduce the rate at which your outstanding balance is increasing.
However, you will still need to be able to pay off at least the minimum amount each month.
Putting together a realistic payment plan
If your finances have been badly affected by the coronavirus outbreak, your lender might put together a different repayment plan.
This might include a combination of things to make your repayments more manageable.
All lenders, including store card providers, are required to work with you to work out a repayment plan based on your circumstances.
What’s the best way to get in touch with my store card provider?
Call centres are busy and waiting times are often long. If you can’t get through, try emailing them or going online. This also means you can prove when you contacted them, which may be helpful if they ever suggest you hadn’t.
Try to keep a record of all letters and emails between you and your creditors. If they phone you, make a note of their name and when they called.
If you’re not happy with the way any creditor has responded or behaved, make a note of the details in case you make a complaint later.
There are several template letters for different situations that may help you.
For example, National Debtline
have letters for various scenarios, including asking for a statement showing what you have left to pay on your store card and asking creditors to hold off taking action while you get advice.
Impact of further support on your credit file
If your store card provider does offer you further support once your payment holiday ends, this will be recorded on your credit file. This could mean that you may find it more difficult to borrow money in the future.
Next steps if I have missed a payment
If you have missed a payment contact your store card provider to explain your situation. You should avoid taking out more credit unless you know you can afford to pay it back.
What legal protection do I have?
The Consumer Credit Act gives you rights when dealing with creditors, such as card providers. For example, if you fall into arrears they must:
- give you time to bring your account up to date before they take any more action
- send you regular statements and arrears letters if you fall behind.
Find out more about store cards
and how they work in our guide.
When to get debt advice
If you’ve already missed payments and are not able to come to an agreement with your store card provider, it’s best to get advice as soon you can, especially if you’ve got other debts as well.
Find out more on the StepChange website
about how debts are collected when you are in arrears.
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