Virgin Money makes changes to repayment system

Many Virgin Money credit card customers have been pleased to hear a recent announcement from the financial giant with regards to the repayment allocation on its credit cards. Virgin has announced that as of the start of September any repayments made on the Virgin credit cards will be allocated to the more expensive debt first, which could potentially save credit card holders a fair amount in interest.

Under the current repayment system, as is the case with many credit card providers, anyone that repays their debt gradually on the Virgin credit cards will see the repayment being out towards the cheapest debt first, which is often interest free debt. This means that more expensive debts that have high interest rates can be left to faster and continue accruing interest, which means that customers often end up paying out more.

The move to make credit card providers allocate customers’ repayments in this way has been pushed by regulators and financial authorities in the UK following similar moves that were taken in the United States. However, whilst lenders who offer credit cards will have to adopt these measures eventually many have surprised customers by bringing in the moves earlier than was necessary.

Virgin Money has become one of a number of credit card providers to bring in the changes to the allocation of repayments earlier than they needed to, and collectively customers could save a huge amount on interest as a result of these changes being made early.

One customer said: “I think its great that Virgin have decided to take this action early, because it will allow customers to save a fortune on the interest that they would otherwise have to pay.”

Tags: business, Credit card, current repayment system, way, finance, regulators, Virgin Credit Card, credit