Martin Lewis shares 'golden rule' for Brits struggling with credit card debt
Martin Lewis has shared his "golden rule" for anyone struggling with credit card debt during the cost of living crisis.
The Martin Lewis Money Show returned to ITV screens this evening - and tonight's episode focused on credit cards and debt and how you can tackle them. Martin opened the show by explaining one of his "go to" techniques for managing debt - which is balance transfers.
A balance transfer is when you move your existing credit card balance to a new card with a 0% period - so you stop paying interest for a set period. By not paying interest, you'll clear your credit card debt more quickly - and only pay back what you owe.
The Moneysavingexpert.com founder told viewers that balance transfers were a good option for those who could not afford to clear their credit card debt in full and were paying interest on it. Martin said: "The golden rule here is that if you cannot afford to clear your credit card or your debt in full and you're paying interest, you cannot afford not to check for a 0% balance transfer. I'm not saying you will get one, I'm saying you should absolutely check."
The Martin Lewis Money Show focused on all things credit cards this evening (ITV)If you’re considering a 0% balance transfer card, Martin says you should first use an eligibility calculator to check which card you are likely to be approved for. The calculators look at lots of different cards and will then show you which one you're most likely to be accepted for. You can find these online, both on the individual card providers' websites or on many comparison sites.
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The MSE founder said it was worth noting that people with the best credit ratings will be accepted for the top deals. The Money Saving Expert founder also advised people to make sure they also check if there’s a fee to move the debt but even if there is - which is often around 3% of the total - it is usually a lot less than the interest rates charged credit cards.
However, if you get a no from an eligibility checker or you have just tried just one place for a card, Martin says you should not just give up - and urged Brits to continue to shop around. However, he noted that some of the longest deals have disappeared from the market. This has been due to the Bank of England's interest rate rises which has made the cost of borrowing has become much more expensive.
If you are "lucky enough" to have a choice of cards, Martin said that rule number two was to go with the one with the lowest fee in the time that you need to repay. If you don't know how long it will take you to repay, then you should "just go long" as this is safer.
The consumer guru finished off the section by sharing some of the other "golden rules" you need to follow if you are using the balance transfer technique to tackle your debt. The first was that you couldn't usually do a balance transfer between two cards from the same brand, you should try and keep it as simple as possible. Secondly, you should not spend on a balance transfer card or withdraw cash.
Thirdly, you should also never miss the minimum monthly repayment or you might lose the 0% interest-free period, meaning it will cost you more. Finally, Martin said you should try and clear as much debt on the card as possible in the time you have it.
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