Credit card users warned over order of payments

Credit card users have been warned that many of the foremost providers in the UK do not clear the most expensive forms of debt first.

Research by Moneysupermarket.com has found that the order of payment patterns used by financial service firms could leave people with credit card debts in the red for longer than necessary.

In fact, credit card companies tend to use repayments from customers to clear the least expensive forms of debt first and only remove the most costly arrears when they have to, according to the price comparison service.

“Many cardholders paying the minimum balance each month are being stung because their money is only paying off the cheapest debt,” said Moneysupermarket.com’s head of credit cards Steve Willey.

“Card companies seemingly have no appetite to help their customers with a fair approach to repayments,” he added.

A report from the Office of Fair Trading suggested that many British consumers are adding to their credit card debt burdens by failing to secure the most competitive deals on the market.

track

Tell others:

shortlink