What is payment holiday? Here is one definition from :
A payment holiday is an agreed period of time when you can take a break from making payments. You can take a payment holiday up to the extent of any previously accured overpayment.
Also, from UOB’s description of payment holiday:
Defer paying your bills for ANY MONTH OF YOUR CHOICE, with NO LATE CHARGES^ incurred at all with UOB Payment Holiday
It sounds like a good deal, is it worth taking? No. Why not?
This is because interest charges – usually 24 per cent per annum – still apply to the outstanding balance, and it could lead to a habit of rolling over credit card debt, they said.
CIMB-GK economist Song Seng Wun cautioned:
The habit tends to be to build up debt in small amounts and let the outstanding balances grow, without realising the interest payments will start to balloon. The bottom line is, try not to owe credit card companies any money.
Said Credit Counselling Singapore’s assistant director Tan Huey Min:
Remember that the bank is a profit-making institution and hence, whenever it offers a new feature, for example a payment holiday, there is generally a cost that the consumer would have to pay for.