Britons having to take out a bad credit mortgage because of problems with debt may well be paying off their cheapest debts first and therefore seeing interest on larger sums spiral out of control, it has been suggested.

Research from MoneyExpert.com has shown that three quarters of card bills see the least significant debts being paid off first, and has suggested that Britons do their research in order to try and avoid this kind of repayment scheme.

"If you do want to use your card for cash withdrawals or purchases there are some cards that’ll help you pay those off first to help you avoid prolonging the interest incurred. But those are few and far between," commented MoneyExpert.com chief executive Sean Gardner.

Responding to the study, Nationwide has said that the industry should change to a positive order of payments as a matter of policy.

The building society also noted that new regulations that come into force next October will oblige provider to reveal the order of payments they used, but said that this was not enough.

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