Overdrafts are most likely to push many Brits into debt, Martin Lewis says

Martin Lewis told his podcast audience that overdrafts, which he said often carry around 40% interest, are the riskiest common form of borrowing in the UK and that people should prioritise reducing overdraft balances and time direct debits before payday.

Martin Lewis discussed borrowing risks on his podcast and said overdrafts—not credit cards—are the most likely route into debt for many people. He noted typical overdraft charges can be around 40% interest, compared with a cited typical high-street credit card rate of about 24.9%. He described common situations where people pay down credit cards with overdrafts and said he would outline ways to cut overdraft costs in a podcast masterclass. Main details: - Martin Lewis said on The Martin Lewis Podcast that overdrafts are the most dangerous mainstream form of borrowing in the UK. - He reported that many overdrafts charge about 40% interest while a typical high-street credit card rate he mentioned was around 24.9%. - He described how using an overdraft to pay other debts can increase overall borrowing costs. - He reported two practical steps he discussed: prioritising reduction of overdraft balances and moving direct debits to just before payday, and he announced a debt cost-cutting masterclass on the podcast. Summary: The comments underline that overdrafts can carry higher rates than many credit cards, which can raise overall borrowing costs for people who use both. Martin Lewis said he will cover methods to reduce overdraft costs in an upcoming masterclass on his podcast.