Thursday 17th August 2006
HSBC bank has come under fire from rival Nationwide for changes to its repayment terms.
"It is disappointing to see yet another credit card provider switching to an adverse order of payments," said Nationwide Building Societys executive director Stuart Bernau.
The bank has had a change of policy, which means that customers have to pay off the borrowing that has the lowest rate of interest first.
This means, for example, that if the credit card charges a lower rate for purchases than for cash advances, the purchases will be paid off before the cash advance balance is touched.
Or indeed, if there is a zero per cent balance that has been transferred, this must be paid off before anything else.
"We continue to campaign against this money-making practice and feel that if a credit provider wants to generate more revenue from its customers, it should be more open and transparent about the way it goes about it," insisted Mr Bernau.
HSBC recently announced a new credit card that offers a 12-month zero per cent deal for balance transfers, which is currently unusual among credit card lenders.
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