Money Saving Expert Martin Lewis has given crucial advice to a viewer who emailed in to ask about her credit card debt.
The viewer, who is called Corrine, emailed into the ITV show to ask the financial guru a question regarding loans and credit card debt. Corrine said: "I’m constantly in my overdraft and have two credit cards outstanding.
"Am I better off taking out a loan to pay off my debts as this will work out cheaper considering interest rates and fees. What would you advise?"
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Martin was quick to respond to Corrine, starting off with how loans work dependant on their size. The expert explained: "With a loan, you’re applying for a specific amount.
"So, not just your credit score, but your affordability score also has an impact on whether you would be accepted.
“So you could apply for a £10,000 loan with a company and be rejected, but a £1,000 loan with the same company could be accepted.
“The problem in this case is if you are only going to get the smaller loan, small loans cost more than big loans because the interest rate is much higher."
Martin then went on to explain what Corrine should do in her own individual circumstance. He added: "So, I would suggest - well, we are talking about zero per cent on credit cards.
"There aren’t any loans at zero per cent, the cheapest loan is around five per cent.
“So I would look first at whether you would be accepted for a credit card balance transfer to cut the costs - assuming that you could afford to make the minimum repayments.”
More information on credit card debt and loan repayments can be found on the Money Saving Expert website.
The Martin Lewis Money Show returns to ITV on Tuesdays at 8pm.
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