Martin Lewis reveals one thing millions of Brits do that's likely to get them in debt

This January loads of us have made promises to ourselves, whether that's to eat healthier or to be better with our money.

If the latter applies to you, and let's face it, most of us could do with a bit of financial education, Martin Lewis has issued some critical advice for keeping on top of our money.

Speaking on The Martin Lewis Podcast, the financial journalist touched on the one thing most likely to get Brits into debt, and it's not credit cards.

While many people associate debt with credit cards, as Martin points out, they can be an incredibly helpful tool for providing flexibility, as the balance doesn't need to be paid off straight away.

Of course, there is always the risk of people mismanaging their credit cards, but as it turns out, there's one other form of borrowing that Brits need to be even more careful of, and that is overdrafts.

"The most dangerous form of mainstream borrowing in the UK isn't a credit card, it's an overdraft. Most overdrafts cost 40 percent interest," he said.

"Compare that to a typical high street credit card of just 24.9 percent. So while many people think credit cards bad, debit cards good, actually, if you're overdrawn, your debit card is a debt card too and it is more expensive than the credit card."

Warning. Overdrafts are the worst form of mainstream debt. The interest rate will shock you…

A snip from the new ‘Debt cost cutting Masterclass: Cards, Loans, Overdrafts, BNPL’ episode of the Martin Lewis Podcast. Listen to it on https://t.co/P4U5KDLzT0, Apple, Spotify & all… pic.twitter.com/4Tkkm0Ssd9

— Martin Lewis (@MartinSLewis) January 9, 2026

Martin added: "To put it in context, people who have both will often think I need to try and pay off my credit card with my overdraft. So they're paying off a 24.9 percent debt, but they're building up debt at 40 percent."

So what is the best way to handle your borrowing?

Well, Martin suggested the best thing to do is move direct debits to just before payday to minimise interest payments while clearing out what you owe.

"You'd actually want to pay just the minimums on the credit card and get rid of the overdraft. Think of your overdraft like a debt. Plan to pay it off. So let's say you're paying off £100 a month," he explained.

"That means at the end of this month if you've got £700 in your overdraft, you need to budget and go through things to make sure next month it's only £600. You want to move all your direct debits if you can to just before payday so you're not overdrawn as much.

"And there are ways to cut the cost of your overdraft to zero percent too. I'll be running through all that in my debt cost-cutting masterclass in the podcast."