Calls for credit card companies to change payment allocation
Nationwide Building Society has suggested UK consumers would benefit if credit card companies adopted certain American payment practices.
Calls for credit card companies to change payment allocation”
A new law in the US next year will see providers forced to use payments to cover higher-rate balances first rather than the current trend for cheaper debts.
It means cardholders will have to pay less interest - a result Nationwide hopes to see mimicked in Britain.
Consumer finance director Jeremy Wood said: "We believe the UK should follow the US and make card providers allocate payments in a positive way.
"Consumers can ill-afford to lose this much money, especially in the current financial climate."
According to Nationwide, customers could save up to £213 in the first year by taking a card that allocates payments in a positive way.
In related news, cardholders are being urged to switch their balances to providers offering a lower rate of interest.
The advice follows research from Abbey which found more than half (55%) of credit card holders have not transferred any of their existing debt to a 0% balance transfer deal.
Written by Marcus Jenkins ©
