Money expert Martin Lewis is urging shoppers to ditch cash and use credit cards instead – to get better protection and money back on your spending.<\/p>\n
Money Saving Expert Martin Lewis<\/a> returned on his The Martin Lewis Podcast on Monday with a fresh batch of savvy advice for his listeners on BBC<\/a> Sounds, Spotify and Apple Music.<\/p>\n There, he took a call from a listener called Phil, who asked him about paying off his mortgage<\/a>. Following his question, Martin<\/a> explained to Phil how paying for items on a credit card is actually better than paying in cash, assuming you are sensible enough to pay off the card in full every month.<\/p>\n Credit cards, Martin explained, give you protection on your spending and cashback on your purchases, both of which cash can\u2019t do.<\/p>\n Martin<\/a> explained: \u201cRight now, there\u2019s a credit card from Lloyds<\/a> that pays you 1% cashback on all of your spending on it.<\/p>\n \u201cOf course, if you were to borrow on it and you weren\u2019t to pay that off in full at the end of the month, you would pay interest on it.<\/p>\n \u201cBut if you set up a Direct Debit to pay it off in full, you neuter its borrowing ability.<\/p>\n \u201c…If you were to shift all your spending onto that card, then for every \u00a3100 you spend, they would pay you \u00a31, and the money is paid every January.<\/p>\n \u201cSo instantly, everything is automatically \u00a31 cheaper for you.\u201d<\/p>\n Martin then added that credit cards also offer the best protection on spending, adding: \u201cPlus, the second thing. You say you pay on cash. Paying on cash is the least protected way to pay. You have absolutely no protection if you pay on cash.<\/p>\n \u201cBank transfers are pretty bad, cards are the strongest. Debit cards and credit cards have chargeback protection but by far the strongest protection is Section 75 protection, and that only applies to credit cards and only to items \u00a3100 to \u00a330,000.<\/p>\n \u201cIn most cases – and there are some exemptions – the credit card company is jointly liable with the retailer if anything goes wrong, or even if the retailer went bust you can go to the credit card company. Even if you only spent a penny on the credit card and the rest you paid for in cash.<\/p>\n \u201cSo for me, I do all my spending on plastic because I get rewards and because I get cashback and because I get Section 75 protection.<\/p>\n \u201cThe reason I normally say to people you shouldn\u2019t do that is if you don\u2019t trust yourself to have a debt machine like a credit card could be if you get it wrong and don\u2019t pay it off in full in which case don\u2019t do it. But you don\u2019t sound like that type of person.\u201d<\/p>\n Martin added: \u201cFor me, it\u2019s not actually a debt card. I mean no more than a debit card is a debt card. Because if you have a debit card, you can go overdrawn on it.<\/p>\n \u201cAnd that\u2019s a debt card too. So if you have a credit card and it\u2019s paid off in full and you\u2019re getting cashback on it and you can afford to pay that then because there\u2019s never any interest, as long as you don\u2019t withdraw cash, I would say that\u2019s your way to spend.<\/p>\n