Millions of UK shoppers who rely on their debit cards for everyday purchases may be putting themselves at a disadvantage, according to a new warning issued by Money Saving Expert Martin Lewis. Speaking on the latest episode of The Martin Lewis Podcast, the financial guru explained why debit cards are not always the safer or cheaper option, and in some cases, may actually cost consumers significantly more.

Lewis, known for his direct, myth-busting financial advice, said many people believe debit cards represent “responsible spending” while credit cards symbolize debt. But he insists this assumption is outdated and often wrong, especially for anyone who may slip into overdraft.

Why Martin Lewis Says Debit Cards Can Cost You More

Lewis broke down a common misconception: that using “your own money” is always the safest option. While this idea sounds sensible, he says the financial reality works differently, particularly if your account goes into overdraft.

He highlighted that overdraft interest rates are now shockingly high, often around 40% APR at major banks. By comparison, many credit cards sit at around 25% APR, meaning that borrowing through a credit card can actually be the cheaper form of debt.

Lewis warned:

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

He emphasized he is not encouraging consumers to borrow unnecessarily. Instead, he clarified that if someone must owe money, a credit card is usually the less damaging place to owe it.

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The Major Protection Debit Cards Don’t Offer

Beyond interest rates, Lewis says debit cards lack one of the most valuable protections available to consumers: Section 75 of the UK Consumer Credit Act.

This rule makes credit card companies jointly liable for purchases between £100 and £30,000, meaning if a retailer fails to deliver, goes bust, or refuses a refund, the credit card provider must step in and cover the loss.

Lewis explained:

“If you pay even a penny of a £100+ purchase on a credit card, the credit card company is liable for the entire amount.”

Debit cards, however, only offer chargeback, a weaker, non-legal protection which banks can deny.

This key difference means consumers using debit cards may be left financially exposed if a purchase goes wrong.

Why debit cards can cost you more than credit cards! 

A snip from full “Wallet Workout: Gain (£100s) pounds” new episode of the Martin Lewis Podcast. Listen to it all on https://t.co/JuhMaGUFS3, Apple, Spotify & all the usual pod players pic.twitter.com/oNFnmf6kH4

— Martin Lewis (@MartinSLewis) November 14, 2025

Credit Cards Offer Extra Benefits Many Shoppers Forget

Lewis also highlighted additional perks that many consumers overlook:

• Builds credit score when paid off monthly
• Rewards and cashback available on many cards
• Stronger fraud protection
• Better dispute resolution

He reiterated that this advice applies only to those who repay their credit card in full:

“If you’re paying off in full each month, you do have the money.”

Public Reaction: ‘What Happened to Only Spending What You Have?’

When a clip of Lewis’ explanation was posted to X (formerly Twitter), one user asked why he seemed to be moving away from the classic rule of not spending money you don’t have.

Lewis responded directly:

“It’s still live and kicking. I think you’re misunderstanding the point.”

He encouraged listeners to hear the full explanation on BBC Sounds.

FAQ

1. Why is Martin Lewis warning people about using debit cards?

Martin Lewis warns that debit cards can expose consumers to higher costs and weaker protections, especially for those who accidentally enter overdraft. Overdrafts often charge around 40% interest, which is higher than many credit cards.

2. Are debit cards really more expensive than credit cards?

Yes, if you enter overdraft. Debit overdraft rates commonly exceed 39–40% APR, while many credit cards sit around 25% APR. This makes credit cards the cheaper form of debt when used responsibly.

3. What is Section 75, and why does it matter?

Section 75 of the Consumer Credit Act gives shoppers legal protection when paying for purchases between £100 and £30,000 using a credit card. If something goes wrong, the credit card provider is legally liable, offering much stronger protection than debit cards.

4. Does using a debit card offer any buyer protection?

Debit cards only offer chargeback, a voluntary scheme banks may reject. It is not legally guaranteed, making it less reliable than Section 75 on credit cards.

5. Should I switch to using a credit card for purchases?

Martin Lewis recommends using a credit card only if you repay your balance in full every month. This gives you powerful protection and avoids interest charges entirely.

6. Is it dangerous to use credit cards?

Credit cards are safe and beneficial if paid off monthly. Problems arise only when users carry a balance, which incurs interest. Used correctly, credit cards can improve your credit score and offer rewards.

7. Are credit cards better for online shopping?

Yes. Credit cards provide strong fraud protection, easier dispute resolution, and Section 75 coverage. This makes them the safer option for high-value or online purchases.

8. What is the safest way to pay for items over £100?

Martin Lewis strongly recommends paying with a credit card, even if it’s just part of the total, to activate Section 75 protections.