Order of payment structures implemented by the majority of financial service providers mean UK British credit card users find their debts more difficult to pay off, it has been claimed.
According to MoneyExpert, close to three-quarters of all lenders use repayments to pay off debts that cost the least in interest first and pay of the most expensive forms of debt only when no other arrears are outstanding.
Interest rates vary depending on what form of credit card debt has been accrued and MoneyExpert is convinced that lenders generally leave expensive debt outstanding, as in the case of cash withdrawals.
“If you do want to use your card for cash withdrawals or purchases there are some cards that’ll help you pay those off first to help you avoid prolonging the interest incurred. But those are few and far between,” said Sean Gardener, MoneyExpert’s chief executive.
“As with all credit card deals you need to check that the card you’re using is suited to your requirements,” he added.
Last month, the UK’s payment association Apacs launched a guide aimed at helping young British consumers avoid facing problems with credit card debt.