Martin Lewis debit card warning: Money Saving expert explains why they may not always be preferable over a credit card

The Money Saving expert explained why it may not always be best to use a debit card over a credit card during a recent episode of the BBC's The Martin Lewis Podcast.

He said: "Many people tend to think credit card's bad, debit card's good, but it just isn't that simple."

People do tend to think that it is best to only spend the money that they actually have in the bank rather than put money they don’t have on a credit card. But, the money man explained that it depends on specific circusmtances and if a person is overdrawn, their debit card is actually no different to a credit card and often has higher interest rates.

"A typical high street overdraft is at 40% annual interest compared to a high street credit card at 25% annual interest," he said. “Overdrafts are more expensive debt than credit cards."

He did, however, clarify that it is almost best to not owe any money at all, either a debit or credit card - but said that if people do find themselves in debt it’s better to have that on a credit card and not a debit card. "If you had to owe on one, you'd be best not to owe on either. If you had to owe on one, you would be better to owe on the credit card," he added.

Credit cards also offer numerous benefits as well, such as allowing you to build your credit score and earn rewards when spending. They also provide more consumer protection when spending.

The financial pro explained that under Section 75 of the UK's Consumer Credit Act 1974 card companies are liable for purchases made on their services. "Section 75 rules state, if you're buying something that costs over £100 up to £30,000 and you pay for any of it, even a penny of it on a credit card, the credit card company is liable for the entire amount and jointly liable with the retailer," he said. "So if something goes wrong, you can go back to it. On debit cards, you only get charged back."

When a clip from the podcast was posted on X, one user asked “What happened to "if you haven't got the money you can't afford it" moral?” Martin responded: “Its still live and kicking, I think you're misunderstanding the point. If you're paying off in full each month you do have the money. Listen to the podcast where its explained in full.”

Listen to the full Martin Lewis podcast now on BBC Sounds.