Martin Lewis says ‘never do this’ to couples clearing credit card debt | Personal Finance | Finance

Money-saving guru Martin Lewis found himself embroiled in a “threeway row” with a couple over their conflicting strategies to tackle their financial woes.

During the ‘Tell Us’ segment of his BBC podcast, Martin was unexpectedly drawn into a domestic dispute when a listener named Flo rang in for advice. She and her husband were at loggerheads about how to best handle their “debt snowball”.

Flo detailed the dilemma: “Our current lowest debts are two credit cards, one in my name, one in his. We’re tackling this debt together. Both of them have £3,000 on them and both come out of their promotional 0% interest rate at the same time.

“At the moment we’re in a disagreement over which card gets paid off first. I think that mine should be paid off first because he will be more likely to be able to get another 0% interest credit card while we’re waiting to pay off mine but he would rather pay off his credit card first.”

Seeking wisdom from the financial whizz, Martin Lewis seemed reluctant to side with either party, instead suggesting an alternative approach: “The first thing I’d do is when you are a month or so or six weeks away from the 0% ending, you should both be applying for 0% balance transfer to be able to shift the debt again to a new card to keep it on 0%.”

In an ideal world, Martin hoped they would both be approved. However, if only one person gets the green light for the new 0% card, as Flo suspected might happen, then Martin’s advice was to concentrate all their spare cash on clearing the debt that wasn’t approved and would be subject to an interest rate of around 20%, he estimated.

He also highlighted: “There are a number of cards that will allow one person to apply for a balance transfer and transfer their partner’s debt onto it too.”

If both applications are unsuccessful, the money-saving expert suggested checking the rates their cards would revert to once the 0% offer ends and pay off whichever card has a higher rate first.

Martin laughed as he realised he had just created a “three-way row” with the listeners but encouraged them to prioritise these three options “ahead of your ‘who can pay it off’,” plan. He also issued a warning that this strategy is only suitable for couples who trust each other financially.

On a rare serious note for the usually upbeat presenter, he warned: “This is assuming you would work together, I’m very well aware of financial coercion and its part in domestic abuse so don’t let anybody force you to do anything. Don’t take out debt in your name to pay off their debts, that can be a big problem.”

In the podcast, Martin delved into his “debt snowball” method that Flo mentioned, which is his standard guidance for those grappling with various debts. He advised: “Write down your debts in order of their interest rates, then focus all your spare cash in clearing the one with the highest interest rate first. That’s the one growing most quickly.”

“Don’t clear the biggest one, don’t clear the smallest one, don’t clear them all evenly. Clear the one with the highest APR rate first. Once you’ve done that you go to the second highest.”