AA credit card introduces positive change to payment allocation

AA Credit Card customers are being told that the way payments are allocated to their credit card balance is changing for the better.

From 1 September 2010, repayments to the AA Credit Card that don't pay off the full balance will now go towards paying off balances with the highest interest rates first. This means that balances with lower interest rates, such as those at 0 per cent promotional rates, will be paid off last.  This comes four months ahead of the deadline for changes announced by the Government earlier this year*.

Mark Huggins, director of AA Financial Services says he is pleased that customers will benefit ahead of the market.

"The AA welcomes this positive move, which will save money each month for any customers who have balances at different rates.

"Even before the Government announcement was made in March, a great deal of the necessary system changes had already been scheduled in, meaning that AA customers will be among the first to enjoy this change.

Huggins adds: "The consumer credit market has become very complex over recent years and this change is one important step in helping millions of card holders to pay off their debt sooner.  It is a change that the AA wholeheartedly endorses."

Starting in June all customers will receive notification outlining the changes to the way payments are allocated to their accounts.