Lloyds offers credit card holidays ahead of regulator changes
Lloyds Banking Group Plc will offer interest-free overdrafts and credit card payment freezes to customers struggling during the coronavirus pandemic, pre-empting the Financial Conduct Authority’s latest measures to help households.
The U.K.’s largest mortgage lender said borrowers will be able to apply online for credit card holidays this week, following similar offers for home and personal loans. It will provide interest-free overdrafts of up to 300 pounds ($372) next week.
Lloyds announced the changes Thursday, shortly after the British financial watchdog said it was planning to change its loan rules from April 9. Credit providers have until Monday to raise objections.
Under the watchdog’s proposal, customers could ask their bank for an interest-free overdraft of up to 500 pounds ($620) even if they do not have any borrowing facility in place. The regulator said that customers with personal loans should also be able to get a a three-month payment freeze, although lenders would still be permitted to charge interest during this period.
“If confirmed, this package of measures we are proposing today will help provide affected customers with the temporary financial support they need to help them weather the storm during this challenging time,” said Christopher Woolard, the FCA’s interim chief executive officer.
The Covid-19 pandemic has already led the U.K. authorities to increase protection for British borrowers, introducing mortgage payment holidays and support for small- and medium-sized businesses.