Consumers could be paying extra interest

New research has shown that consumers could be paying excessive interest on their credit cards as card providers clear their card balance in the wrong order.

When interest is paid off, customers often think that they are paying off their oldest and thus most expensive debt, when in fact most are paying off their most recent and therefore cheapest debt.

Unfortunately, only four UK card providers operate a positive payment hierarchy, meaning that many are left short due to this simple trick.

Richard Mason, director of credit cards at moneysupermarket.com said: "Unless the consumer clears their balance in full each month, it’s worth paying some attention to the small print surrounding the payment hierarchy."

Consumers can thus tell if they are being tricked into paying extra money unnecessarily.