We don't like the payment hierarchy

Under the spotlight this week is the "payment hierarchy" practice followed by most credit card providers.

The type of debt you have on your credit card will vary and what is actually paid off when you make a payment to the credit card company will vary, too.

For example, balance transfers, which often benefit from lower APR rates, are cleared before purchase debts, which are in turn cleared before cash withdrawals.

Stuart Glendinning from Moneysupermarket.com says: "This devious approach means that any repayment you make clears the lowest interest yielding balances first and the highest last. Those individuals who are not clearing their debt during the interest-free period will have to make higher interest payments."