Money Saving Expert (MSE) founder Martin Lewis has issued an urgent warning to anyone using a debit card while using an overdraft.
On Tuesday night's episode of the The Martin Lewis Money Show Live on STV, the financial guru went over debt and how people in these circumstances can clear it.
During the debt segment, he advised that people in serious trouble to contact services such as StepChange should they be unable to get themselves out of debt.
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In addition to this, he also handed out a warning to those using debit cards - especially if they're attached to an overdraft.
According to Yorkshire Live, the Money Saving Expert set out how overdrafts - ie, the ability to 'go overdrawn' in a bank account and repay the bank the money later, for example to make sure a bill or bit of spending isn't stopped by the bank due to lack of funds - are actually the most expensive way to go about borrowing money.
Martin Lewis explained that the average bank loan is under eight per cent APR (the cost of borrowing rate) and the average credit card rate currently sits at 19 per cent APR.
Explaining further Martin added: "Credit cards are horrible. Debit cards are great'. Not true.
"If you're overdrawn, your debit card is a debt card, and most consumer overdrafts are now 40 per cent, double a high street credit card. Which means debit cards are now danger cards if you're overdrawn.
"Now the first thing if you're overdrawn is to check your eligibility for a - per cent overdraft and to what amount.
"People also ask me, can I shift my overdraft onto a 0 per cent card? The answer is yes, but only a few specialist cards, it's called a money transfer.
"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.
"With your overdraft, treat it like every other debt. Try to shift your direct debits to just before payday, so the longer you're overdrawn, the bigger your interest charges. So if you can move it to just before payday, you won't be in debt for as long and it should reduce the interest."
Martin added: "If you have multiple debts, the rules change. I want you to list all your debts in order of interest rates, highest first. Then you take all the spare cash you possibly have and you pay the highest interest rate ignoring the others.
"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."
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