{"id":115175,"date":"2025-11-16T08:35:00","date_gmt":"2025-11-16T08:35:00","guid":{"rendered":"https:\/\/en.econostrum.info\/uk\/?p=115175"},"modified":"2025-11-16T07:53:46","modified_gmt":"2025-11-16T07:53:46","slug":"why-using-a-debit-card-might-be-riskier","status":"publish","type":"post","link":"https:\/\/en.econostrum.info\/uk\/why-using-a-debit-card-might-be-riskier\/","title":{"rendered":"Why Using a Debit Card Might Be Riskier Than You Think, According to Martin Lewis"},"content":{"rendered":"\n<p>Speaking on his BBC podcast, Lewis raised concerns over the real costs and limited protections associated with debit card use. His remarks come amid rising<strong> interest rates<\/strong> and persistent<strong> fraud cases<\/strong>, prompting a closer look at how different payment methods impact consumer finances.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Overdrafts on Debit Cards May Cost More than Credit Card Debt<\/strong><\/h2>\n\n\n\n<p>On his <strong>BBC Sounds podcast<\/strong>, <em>Martin Lewis<\/em> addressed a common misconception among UK consumers: that using a <strong>debit card<\/strong> is inherently safer or more financially prudent than using a <strong>credit card<\/strong>. According to Lewis, this assumption often leads people to overlook the <strong>hidden costs<\/strong> associated with debit card usage, particularly when an overdraft is involved.<\/p>\n\n\n\n<p>\u201c<em>If you are overdrawn, a debit card is a debt card too<\/em>,\u201d Lewis said, underlining that the <strong>average interest rate<\/strong> for a high street overdraft now stands at <strong>40% annually<\/strong>. In contrast, standard high street credit cards typically charge closer to <strong>25% APR<\/strong>, making the overdraft cost significantly higher over time.<\/p>\n\n\n\n<p>This comparison matters because many people are unaware that a debit card transaction drawing on an overdraft is <strong>effectively a high-interest loan<\/strong>. \u201c<em>It just isn\u2019t that simple<\/em>,\u201d Lewis added, warning that assumptions about debit cards being debt-free can lead to <strong>costly financial missteps<\/strong>.<\/p>\n\n\n\n<p>In his assessment, Lewis made clear that neither option is ideal when debt is involved, but if a consumer has no alternative, the <strong>credit card route may be less expensive<\/strong>, provided it\u2019s used and managed properly. His broader message was that understanding how these products work is vital for making <strong>financially sound decisions<\/strong>.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"550\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">Why debit cards can cost you more than credit cards!\u00a0<br><br>A snip from full \u201cWallet Workout: Gain (\u00a3100s) pounds\u201d new episode of the Martin Lewis Podcast. Listen to it all on\u00a0<a href=\"https:\/\/t.co\/JuhMaGUFS3\">https:\/\/t.co\/JuhMaGUFS3<\/a>, Apple, Spotify &amp; all the usual pod players <a href=\"https:\/\/t.co\/oNFnmf6kH4\">pic.twitter.com\/oNFnmf6kH4<\/a><\/p>&mdash; Martin Lewis (@MartinSLewis) <a href=\"https:\/\/twitter.com\/MartinSLewis\/status\/1989263043885445367?ref_src=twsrc%5Etfw\" target=\"_blank\" rel=\"noopener\">November 14, 2025<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Credit Cards Offer Stronger Protections and Spending Incentives<\/strong><\/h2>\n\n\n\n<p>Lewis also highlighted the <strong>statutory protection benefits<\/strong> that credit cards carry under<a href=\"https:\/\/www.legislation.gov.uk\/ukpga\/1974\/39\/section\/75\" target=\"_blank\" rel=\"noopener\"> <strong>Section 75<\/strong> of the <em>Consumer Credit Act 1974<\/em><\/a>. This regulation makes credit card companies jointly liable with retailers for purchases valued between <strong>\u00a3100 and \u00a330,000<\/strong>, even if only part of the payment is made on the card.<\/p>\n\n\n\n<p>\u201c<em>So, if something goes wrong, you can go back to it. On debit cards, you only get charged back.<\/em>\u201d he explained. In contrast, <strong>debit card users are limited to chargeback schemes<\/strong>, which are <strong>voluntary<\/strong> and lack the legal force of Section 75. This means that while <a href=\"https:\/\/en.econostrum.info\/uk\/uk-banks-offer-185-switching-accounts-july\/\" data-type=\"post\" data-id=\"110572\">banks <\/a>may assist in refund disputes via chargeback, there\u2019s no legal obligation for them to do so, reducing the consumer\u2019s leverage in cases of disputes, scams or defective goods.<\/p>\n\n\n\n<p>In addition to legal protections, Lewis pointed out that some credit cards offer <strong>rewards schemes<\/strong>. These can include cashback offers, as high as 5% in introductory periods, or 1% on an ongoing basis\u2014alongside other benefits like travel points or purchase insurance.<\/p>\n\n\n\n<p>Yet Lewis was careful to note that the advantages of credit cards <strong>only apply if the user pays off the balance in full<\/strong> each month. Otherwise, any potential rewards are easily outweighed by interest charges. <\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p>\u201c<em>Then for many people, done sensibly as long as you\u2019re paying your credit card off in full every month and you\u2019ve chosen the right credit card, it\u2019s often a better way to spend than a debit card<\/em>.\u201d he said.<\/p>\n<\/blockquote>\n\n\n\n<p>For consumers unsure about which payment method to prioritise, Lewis&#8217;s advice serves as a reminder to look beyond surface-level assumptions and assess the <strong>underlying terms and conditions<\/strong> of each option. With overdraft rates rising and fraud risks growing, understanding the true cost of payment choices remains as relevant as ever.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Many UK consumers rely on debit cards for everyday spending, assuming they offer a safer and more straightforward alternative to credit. But according to personal finance expert Martin Lewis, this perception may be financially misleading, especially in situations involving overdrafts or purchase disputes.<\/p>\n","protected":false},"author":10,"featured_media":115178,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[44],"tags":[],"class_list":["post-115175","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","generate-columns","tablet-grid-50","mobile-grid-100","grid-parent","grid-33","no-featured-image-padding"],"_links":{"self":[{"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/posts\/115175","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/comments?post=115175"}],"version-history":[{"count":2,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/posts\/115175\/revisions"}],"predecessor-version":[{"id":115179,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/posts\/115175\/revisions\/115179"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/media\/115178"}],"wp:attachment":[{"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/media?parent=115175"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/categories?post=115175"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/tags?post=115175"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}