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"Nationwide wants UK to follow US with credit card regulations"

By admin | May 3rd, 2009 | Credit Cards

Leading UK building society, Nationwide, has recently said that the UK needs to follow in the footsteps of the United States when it comes to credit card regulations relating to the allocation of repayments.

The building society said that the UK needed to bring in regulations that would change the way in which credit card companies allocated repayments from credit card customers. This comes after new regulations regarding credit card repayment allocations were announced by the United States.

As of next year credit card providers will be subject to new regulations, and this will mean that they have to use the repayments made by credit card users to pay off the highest interest balances on the card first before starting to hit the lower interest or interest free balances.

This means that consumers will end up paying less interest on their credit card debt, as the higher interest balances, such as those from cash transactions, will not be left festering whilst the lower interest ones are paid off.

Officials from the Nationwide said that in the UK the majority of credit card providers use the monthly repayments from cardholders to pay off the lowest interest debt first, leaving the higher interest debt to fester and accrue more interest as time goes on. The building society now wants the government to consider bringing in similar regulations to the United States with regards to allocation of payments, so that consumers are not hit so hard by credit card interest.

Nationwide consumer finance director Jeremy Wood said: “Consumers can ill-afford to lose this much money, especially in the current financial climate. We feel it is time for the government to intervene and introduce regulation to benefit those affected. In the meantime, credit card holders should look at how their card provider allocates payments.”

Tags: credit card debt, credit card repayments, Credit Cards, nationwide, US credit card regulations

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