Better way of paying off your Virgin credit card

Those who have Virgin Money credit cards will be able to save themselves money in interest, as the company is changing its system so that the most expensive debt is automatically paid off first. Before now, repayments would always go towards paying off their cheapest debts first, which meant that zero per cent purchases and balance transfer deals are dealt with before purchases and cash withdrawals.

New rules announced by the government and the credit card industry are pushing through the change, and Virgin are changing over four months earlier than required. The change will come into effect on September 1 this year, after which the most of those who do not pay off their all their balance each month will have to pay less in interest. All UK credit card providers will have to upgrade their order of payments by January 2011.

Virgin Money, which has 2.5 million customers, is following other card providers, such as Nationwide, MBNA, Co-op Bank and Saga, who have already committed to the rule change. Virgin have said that a customer who transfers GBP3,000 to a Virgin Money card at a 0 per cent promotional rate, and then spends GBP1,000 on the card at the higher standard rate over the course of a year, will be GBP70 better off.

Grant Bather, a spokesman for Virgin Money, said Our aim is to make everyone who is a Virgin Money credit card customer better off and we hope this change goes some way to achieving that.