Credit card customers may be failing to read the small print on their contracts, according to a new study conducted by Nationwide. They found that 63 percent of credit card users do not understand the order in which their payments are allocated.

Although this figure is down 6 percent from the 69 percent lacking knowledge of the small print in 2007, it still indicates some consumers may be putting themselves at risk.

According to Nationwide, some credit card companies prioritize the repayment of debts with the lowest rate of interest attached, meaning customers may be racking up greater liabilities than they realize.

Product and marketing director at Nationwide, Chris Rhodes, stated: “Our research results are unequivocal: consumers still don’t understand this issue and continue to be penalized. Further transparency will simply not work. This is a fairness issue and a positive order of payments is now the fairest way forward for consumers.”

Experian urges consumers to only make credit applications which are likely to be successful, as any failed attempts to access the best credit card offers will be stored on their record.

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MSN reports that according to Experian, there are still plenty of choices for credit cards, despite the recession. Consumers looking for a new credit card should prepare properly before applying.

Users should decide if they are looking for reward points, a zero per cent balance transfer or perhaps no interest on spending, Experian stated. They also said this is important because those who apply for a card that does not fit their profile are likely to be rejected.

Experian also said:

“There’s no point applying for a platinum high-earners card if you’re an impoverished student.”

They also warned customers not to make multiple card applications, as every time a lender checks a credit report it leaves a footprint. “If they see a lot of these, they may think you’re desperate or even planning a fraud, so ask for a quote if you want to know what interest you’ll pay or what your spending limit might be.”

The Finance & Lending Association earlier this week warned consumers to keep on top of their credit card spending over Christmas.

©2012 MoneyBlog. All Rights Reserved.