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Martin Lewis Sets Two Rules for 0% Balance Transfers, Warns Over Costly Overdrafts

His latest guidance explains using 0% balance transfers to reduce interest, prioritising overdrafts.

Overview

  • Lewis tells borrowers to check balance-transfer eligibility on comparison sites before applying to avoid unnecessary marks on their credit files.
  • When choosing a 0% card, he advises picking the lowest one-off fee for a long enough interest-free term, citing TSB at up to 38 months with a 3.49% fee and Barclaycard at up to 14 months with no fee.
  • He reiterates that overdrafts often charge about 40% versus roughly 25% on typical credit cards, so people should pay minimums on cards and focus on clearing overdrafts first.
  • To cut overdraft costs, he suggests moving direct debits to just before payday to reduce time spent overdrawn.
  • He warns that sticking to card minimums can take decades—illustrating £5,000 taking around 35 years with about £9,000 in interest—urging an APR-ordered payoff strategy that targets the highest-rate debt first.