Overview
- Lewis says many high-street overdrafts charge around 40% interest, often higher than typical credit card rates near 25%.
- He advises that if someone must carry debt, owing on a credit card can be cheaper than sitting in an overdraft, though avoiding debt entirely is best.
- Credit card purchases benefit from Section 75, making card providers jointly liable with retailers for single items costing £100 to £30,000.
- Debit cards generally rely on chargeback processes, and consumers report inconsistent outcomes across banks, with Ripple Energy customers cited as an example.
- Used responsibly and paid in full each month, credit cards can also deliver rewards such as introductory cashback up to 5% and ongoing rates around 1%.