Martin Lewis was back on TV screens on Thursday night to share more top tips and consumer news in a show dedicated to helping people address and reduce their debt.
Martin explained that debt is more than a money issue and how it can have a “huge impact on your sense of wellbeing” and that it will not solve itself - you need to act.
The financial guru also shared ways to cut existing loan, credit card and overdraft interest down to zero, even if your debt is under control, so that your repayments clear the money you owe and not just service the interest.
Martin said: “My aim here is to show you how to cut interest rates down to zero and the way to do that is with a balance transfer card. That’s when you get a new card that pays off the existing debts on an old card, so you owe the new card, but at zero per cent interest.”
The founder of MoneySavingExpert.com warned viewers not to apply for one of these as that puts a mark on your credit file, instead he suggested using a ‘ balance transfer eligibility calculator ’ first as that will show you the cards you are most likely to be accepted for.
There are several of these available online and once you have found cards that are likely to accept you, Martin explains what to do next.
He said: “Once you’ve got your choice of cards, you want to go for the one with the lowest fee within the zero per cent lengths you’re sure you can repay.”
He then gave examples of the best zero per cent balance card transfers on the market at the moment:
Martin also shares his ‘golden rules’ on balance transfers: “Never miss your minimum monthly repayment and do clear your debt or shift it again before the zero per cent ends, or you’ll pay the standard 20 per cent APR.”
He also advises anyone transferring debt not to spend or withdraw cash on these new zero per cent balance cards as it’s not at the cheapest rate.
Martin then turned his attention to overdrafts and how most now come with a 40 per cent interest rate which is higher than high street credit cards.
The financial journalist suggests clearing your overdraft first and highlighted banks and building societies offering possible solutions.
He said: “Until January 31, if you have Covid-related financial struggles, then Lloyds, Banks of Scotland and Halifax will give you up to £500, three-months, zero per cent interest overdraft.”
He added that Santander will do it too, but their deadline is not as quick.
He also encouraged viewers to speak to their own banks about it as they may not be as open about offering it as the ones mentioned are.
If you are finding it difficult to deal with your finances, Martin urged people to make an appointment with a non-profit debt counselling agency such as the National Debtline, Citizens Advice, StepChange and Christians Against Poverty.
He said: “Go and see them, they are there to help you and work through it - they’re not there to judge you.”
For more help and advice, visit the MoneySavingExpert.com website here.