Banks told they can't cut off people's credit cards until October at earliest

City watchdog the FCA has just suspended its credit card persistent debt rules.

The new regulations have seen people told to massively increase their payments or see their cards cut off, starting from last month.

But given concerns over the impact of coronavirus on people's finances, the FCA has now told banks no one can have their card suspended until October at the earliest.

"Given the challenges facing many customers at present we think they should be given more time, until 1 October 2020, to respond to firms’ communications," The FCA told banks.

"This means that firms would not be obliged by our rules to suspend the cards of non-responders before then.

"This applies both to those who have already received communications from their provider and those that are yet to receive them."

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The FCA was also keen to emphasise that there is nothing in its rules to stops banks giving hard-up customers a break when they are in need.

In fact, it fully expects them to do so.

"We expect firms to provide strong support and service to customers during this period," the FCA said.

"Our rules already provide flexibility to firms in a number of areas and we expect them to use this flexibility to support consumers, bearing in mind customers’ individual circumstances.

"For example, a number of firms have taken some steps to enable customers’ access to cash, such as waiving fees for individual savings accounts (ISAs) and allowing them to end their term deposits early.

"We welcome firms taking initiatives going beyond usual business practices to support their customers."