Adverse order of payments on credit cards

31/08/2007

Nationwide Building Society takes an insight to hidden costs of adverse order of payments on credit cards. Credit card providers over time have worked an adverse order of payments without making it apparent to their customers or clearing up the outstanding amount owed.

Divisional director at Nationwide, Jeremy Wood commented: "Nationwide has long-campaigned for a positive order of payments for all credit card customers as an adverse order of payments costs consumers £500 million every year. Many Credit card providers use low introductory rates to lure people into opening an account. Most providers apply repayments to the cheapest debt first making it unknowingly more expensive for consumers but more profitable for the Credit card providers."

Nationwide forever make sure the most costly debt is paid off foremost. Majority of credit card providers pay off the cheapest debt first, this allows the interest to continue on cash advances and purchases.

Nationwide Building Society stated that Credit card customers do not know the order in which their payments are billed to their account.