MBNA customers to pay most expensive debt first
MBNA customers to pay most expensive debt firstCredit card provider MBNA is changing the way payments are allocated.
From the autumn payments made on their credit cards will be put towards paying off the most expensive debt first.
At the moment most lenders apply payments to cheap debts first, such as balance transfers. Debts that have higher interest rates, such as spending will keep increasing.
The former government outlined these changes will apply to the entire UK credit card industry from January. MBNA will make the changes four months early.
Ian O'Doherty of parent company Bank of America says "Why wait? This is in the interest of our customers and they should be benefiting now".
It is expected that other credit card firms will follow later this year.