Martin Lewis has issued an 'important warning' about a credit card rule that could cost consumers dearly if they fail to pay off their balance in full. The personal finance guru explained that missing even a single penny on a £1,000 balance can trigger interest charges on the entire amount.
Speaking on his podcast, Lewis said: 'Imagine you've spent £1,000 on the credit card. If you then pay off the £1,000 so you totally clear it, there is no interest in the month. But if you were to pay off £999.99, so you're just a penny short, you don't pay interest on a penny for the month, you still pay interest on the entire £1,000.' He reiterated his long-standing catchphrase: 'PAY OFF YOUR CREDIT CARD IN FULL!'
Lewis also offered advice for those already in debt, recommending balance transfers to 0% interest cards. He warned against applying randomly, as this can harm credit files. Instead, he advised using eligibility calculators on comparison sites to find the best options. He highlighted the TSB card offering up to 38 months at 0% with a 3.49% fee, and the Barclaycard with up to 14 months at 0% with no fee.
Additionally, Lewis cautioned against assuming debit cards are always better. He noted that overdrafts can carry higher interest rates than credit cards, and that credit cards offer extra protection under Section 75 rules for purchases over £100.
