I need a bigger credit limit
Some lenders are offering credit limit increases to help people through this difficult time. Get in touch with your credit card provider to see if they can give you one. Make sure you only borrow what you can afford to repay.
What if it’s a new credit card?
If you recently applied for a credit card and were approved, unfortunately, you may not be eligible for a credit limit increase yet. If you are now struggling with paying the balance because of coronavirus, you should still be able to get the payment holiday.
If you are in this situation, contact your bank or lender as soon as possible.
I need a credit card
A good option right now might be a purchase card. Purchase cards give you a set number of months of interest-free spending, which means you won’t pay interest on anything you buy.
Before you apply, it’s best to check your eligibility, to see how likely you are to be accepted. Then you can apply for a card you’re most likely to get and avoid being rejected.
If you’re not eligible for a purchase card, you might be eligible for other credit cards to help you spread your costs over the next few months.
Think carefully before applying for credit, choose the right product for your situation and keep up your repayments, otherwise the offer could be taken away.
Keep in mind, some lenders are being cautious with lending right now. If you see something that’s suitable for you, it might be a good idea to see where you stand now, in case things change.
I have an overdraft — is it okay to use it?
Yes you can use it. But, if you are struggling to pay off your overdraft, there are some new measures in place to help.
Under guidance from the Financial Conduct Authority, banks and lenders can give customers with an arranged overdraft up to £500 interest-free for three months.
If you have an overdraft of more than this amount, only the first £500 is interest-free. If you have less than this amount, for example, £250, you will only get £250 interest-free.
If you want to increase your overdraft limit to £500, you will need to contact your lender to apply for an increase. This means the lender will do some extra checks.
If you’re struggling and need this three interest-free offer, contact your lender as soon as possible. This will not happen automatically, you need to talk to your lender to arrange it.