CREDIT card customers of Scottish bank Halifax, who are unable to pay off their card balance or switch to another provider before the bank closes in June, have been given a new option to clear their accounts.

Customers will be able to pay off the balance at a cost of 10pc, which is below the existing 13.4pc interest rate on the Halifax credit cards.

There will be an option to pay off as little as 3pc of the outstanding balance each month, similar to a minimum payment amount on a credit card.

A spokesman for the bank, which had 50,000 credit card customers when it announced it was closing earlier this year, said those who did not clear their card balance by June 18 would automatically be given the new repayment arrangement.

The bank insisted that the new deal was not a personal loan, but instead a variation on their existing credit card deal with the bank.

This means there will be no need for those with credit card balances to apply to Halifax for a loan to clear the balances.

Halifax/Bank of Scotland (Ireland) is still encouraging customers to pay off their balances or switch to another credit card provider by June 18 when it closes its 44 Halifax branches. From that date, the credit cards will no longer work.

Repayment

But customers in arrears with their credit card payments may not be able to avail of the new repayment offer.

A spokesman for the Scottish bank said that anyone who was one month in arrears on their card repayments would be offered the new deal. Those who were up to three months in arrears needed to contact the bank to discuss the situation.

But those who were four months or more in arrears were unlikely to be offered the repayment arrangements and would probably end up with their card debt being passed on to the debt collection division of the bank, the spokesman said.

The bank said it was pleased with the number of card customers who had switched providers ahead of the closure, but would not say how many had switched.

It added that customers with payment protection insurance on their credit card could continue to pay this until their balance was cleared.