People who spend money via their credit cards are being kept in the dark about how their interest repayments are allocated, it has been suggested.

Nationwide Building Society has insisted that the majority of credit card providers are being less than transparent about which debts are cleared when their customers make a repayment.

In fact, many firms are leaving the most expensive arrears in place to accrue large amounts of interest without clearly informing their customers of the situation, the building society has claimed.

The assertion from Nationwide comes six months prior to the implementation of a new law that will oblige credit card firms to make clear their repayment allocation practices.

"Most providers apply payments to the cheapest debt first making it more expensive for the consumer and more profitable for them," said Jeremy Wood, divisional director at Nationwide.

"What seems like a good deal at first can become unnecessarily costly for cardholders unless they clear their balance in full," he added.

As debt management and money problems worsen for many UK consumers, a report from Moneysupermarket.com recently suggested that more and more Britons are using credit cards in place of cheap personal loans.