Martin Lewis’s debt cost cutting masterclass: mortgages, cards, overdrafts… | Personal Finance | Finance


Always follow the balance transfer Golden Rules:

  • Clear the debt or transfer again before the zero percent ends or you’ll pay the 20 percent ish representative APR in interest.
  • Never miss the minimum monthly repayment or you can lose the 0 percent.
  • Don’t spend/withdraw cash on the card. It usually isn’t at the cheap rate.

3. OVERDRAFTS: Hideous 40 percent rates are standard.

Overdrafts are an even bigger danger than card and loan debt. Almost all major banks charge about 40 percent EAR for overdrafts, double the interest of many high street credit cards.

That means most people with credit cards and overdrafts should pay the minimum on the card and focus on reducing the overdraft, not vice versa.

Can you switch to a zero percent overdraft? Two banks – and – offer zero percent overdrafts for many newbies. And, at the time of writing, they even pay you to switch to them (do check eligibility criteria first). For updated info see

Consider a zero percent ‘money transfer’ credit card. For larger overdrafts, a few specialist cards allow zero percent money transfers for up to 18mths – where for a small fee the card pays cash directly into your bank account, clearing your overdraft, so you owe it at zero percent instead.



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