According to research by Nationwide Building Society, over two-thirds of credit card users do not know the order in which their payments are allocated to their account, when it comes to understanding their monthly credit card statement.

Most people elect to pay off part of their credit card balance each month, rather than clearing the balance. When repayments are made to a credit card, items with the lowest interest rate are paid off first - known as an adverse order of payments. This means that lower APR transactions, such as shop purchases are paid off while high interest items such as cash withdrawals are left to accrue interest and be cleared last. Many experts believe that by applying payments in this manner, credit card providers are making running a credit card account more expensive for the card holder while generating more profit for the credit card provider.

The research comes after consumer watchdog Which? lodged a super-complaint on credit card interest charges with the Office of Fair Trading which found that the top twenty credit card providers use twelve different methods to apply interest rates to their customers' accounts, earning them at least £400 million a year. Furthermore, a recent announcement made by the Department of Trade and Industry intimated that from 1 October 2008, all credit card providers would be required to draw attention to the order of payments they use - an announcement welcomed by Nationwide, who currently operate the only positive order of payments credit card in the U.K and believes all credit card providers should adopt a positive order of payments.

Many credit card providers use low introductory rates to lure people into opening an account, which on the surface can be very appealing, but scratch below the surface and you'll discover that card holders often don't receive the full benefit of these low rates. In many cases these low rates will be offset by high interest rates once the introductory period expires.

As many as two-thirds of credit card holders believe it is important to find a credit card provider that allocates their repayments to the most expensive debt first. However, most people stay with their current provider for an average of six years, even if the service is poor, which serves to highlight the fact that providers are taking advantage of their customers' apathy towards switching.

When choosing a credit card, it is important to explore all your available options, especially if you're considering a balance transfer from an existing credit card, as rates can vary greatly between card providers. Consumer comparison sites can search the credit card market for you in seconds and can help find the best deal for your needs.