How payments are applied

Since January 2011, all credit card companies apply your payment to the highest interest bearing part of your balance first. This means that the way in which payments are allocated always works in the cardholders best interest. For example, different interest rates may apply for things like regular purchases, balance transfers and cash withdrawals – all these rates will be shown in the summary box on the cardholder’s monthly statement.

For more information, please see our joint leaflet with Citizens Advice about this subject.