Martin Lewis debit card warning to HSBC, Lloyds, Santander and Nationwide users

Martin Lewis has issued a warning to anyone holding a debit card with major banks including HSBC, Barclays, Lloyds, NatWest, Santander UK and Nationwide. The personal finance guru explained that many people favour debit over credit cards due to concerns about interest rates, but he has declared them more dangerous than widely believed.

The money-saving expert, who regularly features on ITV and the BBC, took to Facebook to caution that this approach could prove costly. He posed the question: "Is your debit card really a secret debt card? Many people say credit cards bad debit cards good but actually typical high street interest rate of a credit card is 25%."

Martin Lewis highlighted the stark disparity between credit card and overdraft interest rates. "Typical high street interest rate of an overdraft 40%," he explained. "So of the two, it's your debit card spending if you're overdrawn that is more dangerous than a credit card though neither of course are good."

He warned that people failing to grasp this difference ultimately end up worse off. "What that actually means is you're increasing the amount of more expensive debt in the overdraft to reduce the cheaper debt. You would be far better off just to make the minimum monthly repayments on the credit card and focus on clearing the overdraft," he said.

For those with multiple debts, Lewis recommended a strategy called snowballing. "In fact if you have more than one debt the sensible move is always to list them in order of interest rate and then you take the highest interest rate debt which will probably be your overdraft and you focus all your spare cash on trying to clear that while just paying the minimums on everything else. Once you've cleared that you focus on the second most high expensive debt and you try and clear that and so on and so on. It's called snowballing. And hopefully it'll get you debt-free a bit more quickly."

Lewis has previously emphasised that credit card holders must ensure the balance is cleared in full each month. He illustrated the importance by explaining that paying off 999.99 of a 1,000 pound charge still results in interest on the entire 1,000, which is why his catchphrase is "pay off your credit card in full."