Martin Lewis warns against using debit cards saying they are now 'danger cards'

Martin Lewis has warned people of the potential pitfalls of relying on debit cards, branding them 'danger cards'.

Speaking during a recent edition of his Money Show, Martin said with more and more people struggling to make ends meet, the dangers of falling into debt are higher than ever.

But he urged people to be cautious of using their overdrafts, which allow people to access money they don't have once their balance drops to £0.

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The Money Saving Expert revealed that interest rates on most overdrafts now stand at around 40 percent, which is 'double' that of the average high street credit card, which tend to have an interest rate of around 19 percent APR.

Martin said: "Most consumer overdrafts are now 40 percent, double a high street credit card, which means debit cards are now danger cards if you're overdrawn."

He explained it could be worth asking your bank whether there was the possibility of a zero percent overdraft, if not, there is also the option of getting a zero percent credit card.

"Now the first thing if you're overdrawn is to check your eligibility for a zero percent overdraft and to what amount," he said.

"People also ask me, can I shift my overdraft onto a 0 percent card? The answer is yes, but only a few specialist cards. It's called a money transfer.

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"With a money transfer card you apply for a new card and it pays the money into the bank account for you so you can get rid of your overdraft, you now owe the card.

"It's best for large overdrafts, you need a decent credit history."

Martin said that the best way of using an overdraft, if you have to, is to set up direct debits just before payday, to reduce the amount of time that you are overdrawn.

He also added that if you've got multiple debts, it's important to get them in order of interest rate amounts, prioritising the largest.

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"Then you take all the spare cash you possibly have and you pay the highest interest rate ignoring the others," Martin said.

"When this one goes, you then focus on clearing the next-highest interest rate.

"Once that goes, you clear the next and the next and so on.

"It's known as snowballing and it means you get rid of your debts more quickly."