MILLIONS of HSBC customers whose finances have taken a hit due to coronavirus will have their interest-free overdrafts automatically boosted to £500 from April 9.
This increased limit will apply for three months from this date, although the bank stresses it should only be used if necessary.
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HSBC already upped its interest-free overdraft from £25 to £300 last month.
In addition, HSBC says it is automatically cutting the interest rate charged beyond the interest-free buffer from 39.9 per cent to 19.9 per cent also for three months from April 9.
The new 39.9 per cent rate came into force last month, while the lower 19.9 per cent rate is the one the majority of customers were charge prior to this.
HSBC’s move pre-empts plans revealed by the City watchdog this week for banks to boost agreed overdrafts to £500 interest-free.
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The Financial Conduct Authority (FCA) also wants firms to make sure all overdraft customers are no worse off on price when compared to what they were charged before recent overdraft changes came into force.
These proposals are currently being consulted on, among others, with a view to the initiatives being introduced late next week.
The FCA hopes these will be minimum standards with banks going above and beyond.
HSBC is the first of the major providers to lay its cards on the table.
The bank is also offering payment holidays, reduced payments, and breathing space to defer payments on a case by case basis to customers in debt.
On credit cards, it’s automatically suspended all late payment fees for three months, as well as offering temporarily increased credit card limits, again on a case by case basis.
It’s also giving savers penalty-free early access to fixed rate savings accounts, and it’s following the government’s demand to offer three-month mortgage holidays.
You should be able to apply for the measures online if they’re not coming into force automatically – you can check on HSBC’s website.
HSBC adds that customers should contact it online or via mobile channels where possible.
Credit reference agencies have confirmed that none of these temporary coronavirus-related measures will effect credit scores.
See our round-up of the overdraft, loan, and credit card help being offered by banks – and how to apply for them.
Tracie Pearce, HSBC UK’s director of retail banking, said: “The package of support that we have developed and introduced will provide some cashflow support at this crucial time and help people tackle some of the short-term financial impacts of Covid-19.”