Spotlight On: Virgin Money credit card payments

The deal

Virgin Money is changing the order of payments on its credit cards from September so that the most expensive debt gets paid off first.

The good points

Anyone switching will save £70 a year if transferring a £3,000 balance to a 0 per cent Virgin card and then spending £1,000 at higher rates on the card.

The bad points

Charging customers at the highest rates has always been wrong, and caught out millions who have ended up paying interest even though they thought they had a 0 per cent deal. Virgin is simply getting in slightly ahead of rivals who are being forced to be fairer with charges from January. Nationwide, MBNA, Saga and Co-op Bank already have fairer charges.

Conclusion

If you transfer a credit card balance to a 0 per cent deal, ending up being charged interest if you use the card can be a shock. From January it won't be allowed any more, but that's no reason to switch to Virgin beforehand. If you need to switch now, go for the best deal and then don't use the card until fairer charging is introduced.