Banks are offering payment holidays to customers with personal loans and credit cards as millions struggle to get by during the coronavirus crisis
- Payment holidays on mortgage repayments to be extended to credit card debts
- ING will defer credit card repayments for 3-6 months for struggling customers
- Major banks now considering similar offers as coronavirus crisis worsens
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Banks are coming to the rescue of Australians in debt who are enduring financial distress during the coronavirus crisis.
Some of Australia’s leading financial institutions have announced payment holidays for customers struggling to pay off credit card and personal debts.
The move comes in addition to banks offering payment holidays on mortgage repayments to help struggling homeowners.
ING was the first to defer credit card repayments for 3-6 months for cash-strapped customers impacted by the deadly virus pandemic.
Australians will be able to defer credit card repayments until they get back on their feet
Other major banks are understood to be considering extending the payment pause offer to credit card holders.
There is a catch to ING’s payment holiday on credit card debts, however.
‘During a payment pause, credit card repayments are not required, but your card will be inactive,’ the institution states on its website.
‘Interest and fees will continue to accrue to your balance, and at the end of the payment pause your total balance will be higher than it was before the payment pause.’
ING recommends reducing repayments to the minimum monthly repayment, which allows card holders to have continued access to their credit card for everyday use.
ING has extended its payment holidays to credit card holders facing financial distress
Financial experts have welcomed recent moves by the banks to help reduce Australians’ financial distress.
‘People already burdened with credit card debt, who have now lost their job or are too sick to work, are unlikely to be able to keep up with their repayments,’ RateCity spokeswoman Sally Tindall told News Corp.
‘Instead of copping extra late fees on top of the interest charges, this will give them a genuine reprieve.’
Financial adviser Scott Haywood advised Australians to consider freezing higher-interest debts first and said they should ‘bunker down’ with their spending.
‘They should freeze credit cards and personal loans before a mortgage if they do have a mortgage,’ he said.
A move by banks to offer payment holidays on mortgage repayments has been extended to credit card debts (stock image)