Consumers are getting a "raw deal" when it comes to paying off their credit card bills, one expert believes.
Steve Willey, head of credit cards at moneysupermarket.com, explained that most credit card issuers allocated peoples' payments to the cheapest debts first, meaning that people would pay more in the long run.
He said: "Take the case of someone who did a £2,000 balance transfer at zero per cent and then spent another £1,000 on the card.
"If they then paid off £2,500, the remaining £500 balance would accrue interest at the typical APR than continue to enjoy a zero per cent rate."
Mr Willey added that this was common practice among the main eight credit card providers .
However, he did single out Nationwide as one company that allowed consumers to clear their most expensive credit card debts first.
In January Donald MacLeod of Sainsbury's bank said that many people took advantage of zero per cent balance transfer deals to help them manage debt .
News Side
Consumers get raw deal on credit card debt
Wed, 13 Feb 2008
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