Today’s Star Columnist: Martin Lewis - Stop paying interest on debt

Money-saving expert Martin Lewis.
Money-saving expert Martin Lewis.
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For those with existing debts there are record deals available right now to let you cut the cost and save £100s or £1,000s.

Yet as the old adage goes, banks are companies that’d lend you an umbrella when the sun shines and ask for it back when it rains. So getting cheaper credit when in debt is tricky – however I have developed credit card eligibility checkers which can help you check what debt – cutting cards you’re able to get before you apply.

If you can lower the interest cost, then more of your repayment clears the actual debt, not just services the interest – meaning you’ll be debt-free far quicker. So here are the key debt cost cutting need to knows.

I make no apology for saying…. stop borrowing. If you’re struggling, borrowing to make ends meet just elongates the problem – making it even costlier and more difficult. The tips below will help, but if you keep adding to the debt nothing will fix it. So take a deep breath, do a budget and examine all your spending to see if you can cut back.

Best buys are only best if you can get them. While there are many great rates on offer, you need to pass a credit score to get them, and many fail at that hurdle. Worse still when you apply it leaves a footprint on your file and lots of those in a short time can hit your future credit worthiness. On my site we’ve built a free eligibility calculator – which tells you which cards you’re most likely to be accepted for. Just as importantly it does this without leaving a footprint on your file that lenders can see – so you can home in on the right one, minimising applications. To try it go to go to Money saving expert

Shift your overdraft to 0 per cent. Debit cards can be debt cards too – if you’re in your overdraft it’s often more costly than credit cards, especially if you bust your limit. So there are two ways to get out of this.

Switch to a 0 per cent overdraft: Top bank for customer service First Direct offers a £250 0 per cent overdraft (you must pay-in £1,000/month) and for accepted new switchers a free £100 – which should help reduce the overdraft straight away. For some www.nationwide.co.uk 0 per cent overdraft may be bigger, but it’s only for a year and is 50p/day after.

Shift it to a 0 per cent ‘money transfer’ credit card. A few balance transfer cards also let newbies ‘money transfer’.

This is where it pays a lump sum into your bank account, which can then clear your overdraft so you owe it instead. Top pick is www.mbna.co.uk which gives 24 months 0 per cent money transfers for a one off 2.2 per cent fee

Shift credit or store card debt to 35-month 0 per cent.