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Credit card loan customers losing out

Customers are paying £500 million more than they need on credit card balances as lenders are leaving expensive debt on their cards and using payments to eat into the interest-free balances, Nationwide has warned.The vast majority of credit card providers take this route - making sure any payments a customer makes are used to pay off the loan with the lowest rate of interest, such as a zero per cent balance transfer, meaning customers continue to be charged interest on more costly debts.

Nationwide has estimated that there are 10 million credit card accounts where this practice means they are paying more than they need. “When you make a payment, they apply it to the cheapest debt first. That makes it more expensive for you and more profitable for them,” explained Nationwide executive director, Stuart Bernau.

“This is a policy that enables the banks to make half a billion pounds of profit every year - or £50 per year for every credit cardholder affected. I don’t believe that consumers really understand how they are charged interest on their credit cards,” he added.

Posted in fast cash loan, loan rate, cash loan online, credit card consolidation loan, fast loan, direct loan, online loan, loan calculator, cash loan, credit check loan, loan | Comments(0) December 2007