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Martin Lewis Warns UK Debit-Card Holders About Costly Overdraft Debt

He says steep overdraft rates with weaker purchase protections can leave debit users worse off.

Overview

  • Delivering the advice on his BBC podcast on November 14, Lewis addressed customers of major banks including NatWest, Barclays, Nationwide and Lloyds.
  • He compared typical high street overdrafts at about 40% annual interest with mainstream credit cards at about 25%, calling overdrafts the pricier debt.
  • He highlighted Section 75 protection on credit cards for single-item purchases between £100 and £30,000, whereas debit cards generally rely on chargeback.
  • Commenters reported inconsistent chargeback and Section 75 handling across banks and cited Ripple Energy’s administration as a case where refunds have been difficult.
  • He said credit cards can be preferable if cleared monthly due to stronger protections, potential cashback, 0% balance-transfer offers and some cards’ fee-free purchases in Europe.