Martin Lewis issues warning to people who use debit cards over credit cards
Martin Lewis warns of hidden risks of debit cards
- Personal finance expert Martin Lewis has warned that debit cards are not always superior to credit cards, particularly regarding charges and consumer protection.
- He explained that debit card overdrafts typically carry a 40 per cent annual interest rate, which is significantly higher than the average 25 per cent for high street credit cards.
- Credit cards offer Section 75 protection under UK law, making the card provider jointly liable with the retailer for purchases between £100 and £30,000 if something goes wrong, a safeguard not available with debit cards.
- Additionally, credit cards can provide rewards such as cashback, with some offers reaching up to 5 per cent initially and 1 per cent on a regular basis.
- Mr Lewis advised that for those who pay off their balance in full each month and choose the right card, a credit card can often be a more beneficial way to spend than a debit card.