Credit card firms ‘leaving customers in the dark’

Credit card customers are “still being kept in the dark” regarding the order of payments providers use, reports Nationwide.

In April last year, the Department for Business, Enterprise and Regulatory Reform (BERR) announced that credit card companies must highlight exactly how payments are allocated as of October 2008.

However, according to the building society, providers should act now rather than wait until the regulation deadline.

It estimates that credit card customers will have paid around £500 million in interest payments since the announcement was made.

“Most providers apply payments to the cheapest debt first making it more expensive for the consumer and more profitable for them,” explained Jeremy Wood, Nationwide divisional director.

“What seems like a good deal at first can become unnecessarily costly for cardholders unless they clear their balance in full,” he added.

Vicky Redwood of Capital Economics recently warned that the availability of credit is continuing to drop, making it harder for consumers to obtain a credit card.

© Adfero Ltd

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