Study shows consumers 'are paying more than they think for credit cards'
Published On 13 February 2008
The way that the major credit card companies in the UK calculate the interest charged means that consumers are paying significant sums of money, a new study has claimed.Data gathered by consumer website moneysupermarket.com showed that none of the largest eight credit card companies in the UK let consumers pay off their most expensive debt first.
Instead, Steve Willey, head of credit cards at the site, said that the lenders made consumers pay off the cheapest debt quickest and left more expensive borrowing to accrue additional interest.
He added: "Card companies seemingly have no appetite to help their customers with a fair approach to repayments rate.
"Consumers really need to stay one step ahead of the game if they want to avoid lining the pockets of the banks.
"They should look to get a different card to spend with."
Jeremy Wood, a director at Nationwide - the only major credit card provider to offer a positive order of payment policy - welcomed the study's results.
He said: "I am pleased moneysupermarket.com has recognised the importance and impact of the order of payments credit card providers use.
"An adverse allocation of payments costs consumers £500 million in unnecessary interest charges each year - charges that customers can ill afford to pay."
