Virgin Money changes terms for credit cards

In a move which will be welcomed by consumers up and down the country, Virgin Money has announced plans to introduce a whole new credit card payment system from 1 September. Currently any payments made to your credit card will go towards your cheapest debt first, which for many people is the 0% transfer deal, as opposed to purchases/payments and cash withdrawals - all of which attract a significantly higher rate of interest.

However, from 1 September any payments made to your Virgin credit card will go towards the most expensive debt first and then work their way down the ladder. Even though this move has been instigated by the authorities, the likes of Virgin, MBNA, Saga and the Co-op Bank have brought in these changes well in advance of the official deadline. Even though many customers will not realise the difference this will make, it does have the potential to save hundreds of pounds a year for many credit card holders in the UK.

However, this new system should not be given as a sign to spend, spend, spend and we should all continue to spend within our budgets and keep a very close eye on our personal finances.