Credit card customers deposit £500m

31/10/2007

Nearly one year gone, regulation forces credit card providers to pay attention to the sequence of payments used, Nationwide Building Society states not to delay, and offer the clarity consumers need.

Nationwide have budgeted for many years for amplified transparency on credit cards. The Society made the announcement in April by the Department of Enterprise, Business and Regulatory.

Nearly all credit card providers allocate cardholders' payments to the cheapest debt primary, this giving the more expensive transactions to persist accrue interest - rising the cost the consumer must meet. Many consumers do not understand this theory; Nationwide feels that consumers might deposit £500m in interest payments before providers have to draw attention to the order of payments, which might be used in 2008.

Nationwide sets payments received from its credit card holders in a system which is practical to them and deposits the more expensive part of their credit card debt first.

Jeremy Wood, Nationwide director commented: "Many providers apply payments to the cheapest debt first making it more expensive for the consumer and more profitable for themselves.