Martin Lewis points warning to anybody with a debit | U.Ok.Finance Information
Cash skilled Martin Lewis has issued a warning to anybody utilizing a debit card to handle their debt as he defined why they’re truly worse for this than credit playing cards.
Returning to his ITV1 The Martin Lewis Cash Present Reside for a ‘debt buster special’ Martin advised his viewers ‘I’ve received a warning’ as he set out why debit playing cards are worse than credit playing cards for people with an overdraft.
That’s as a result of many high avenue banks charge more curiosity for the overdraft on their debit card present accounts than credit playing cards do, so it could truly be more costly to be overdrawn on a debit card account than it could be to have money on a credit card.
The Cash Saving Knowledgeable founder defined to his ITVX viewers: “I’ve got a warning. Many people think when it comes to debt, debit cards good, credit cards bad.
“But when it comes to debt, if you’re overdrawn, it’s credit cards bad, debit cards worse.
“Most overdrafts with virtually all high street banks and many others are at 40% AER (like an APR, similar-ish).
“Credit cards, 25%. Overdrafts are the most expensive form of high street debt. Treat it like a debt – you want to get out of it.”
Martin mentioned these trying to get rid of their overdraft might contemplate switching to First Direct. The bank affords £175 as a switching bonus, and a £250 overdraft at 0%.
Martin mentioned: “You get £175 for switching to it at the moment, you’ve gotta be new to it, and that can pay off some of your overdraft, and you get a 0% overdraft of up to £250 usually, not every time but most people do.
“But it doesn’t actually move your overdraft for you, so when you apply to switch, the normal process is your direct debits are moved over, your standing orders are moved over, that will happen. Normally it closes your old bank account but if you’ve still got an overdraft your old bank will say, hang on, do you want to pay this off, or we’ll keep it open because you owe us the money.
“So you’ll have to sort out paying that but you can go into overdraft on this one then pay off the old one.”
The Martin Lewis Cash Present Reside remains to be obtainable to watch on ITVX.
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