Personal Finance Guru Martin Lewis has returned to ITV this week, answering a question that many people have about paying off Credit cards.

It can be easy to lose track, sometimes, and find yourself paying for more than perhaps you intended on your credit card. The “I’ll put it on there for now and sort it out later” mentality that credit card companies rely on to make their money.

The challenge, of course, is that once you find yourself halfway into that spiral it can be very difficult to get out of it, especially when you have multiple Credit Cards.

Lewis asked the studio audience what the best tactic was when it came to handling multiple credit card accounts, and the right answer came up very quickly: the card with the Highest interest rate.

While your instinct might be to pay off the card with the highest balance first, the wisest decision is in fact to pay off the one with the highest APR (annual percentage rate) – as this is costing you more money in the long run.

The expert explained: “Always when you’ve got debt, you list them in order and you prioritise the one with the highest APR, the highest interest rate because it’s growing more quickly.”

Lewis also highlighted the importance of making sure you pay off the minimum on all cards every month, with any extra going to reduce the outstanding debt on the card with the highest interest rate.

“You just pay the minimums on everything else and then when that one’s gone, you focus on the next highest. Because if you do them all equally on all of them, you’ve got the one that’s growing most quickly and you’re not trying to get rid of it.”

Failing to make the minimum payment on your credit card can result in a missed payment on your credit report, which can severely damage your credit score.

“Focus your repayments on the highest interest rate and just the minimums on everything else, if you’ve got multiples, and include your overdraft on that.

Credit cards may be an expensive way to borrow if you’re not clearing your balance every month, but overdrafts can be even more expensive when it comes to the interest rate. It’s worth making that a priority.

“Overdrafts these days are around 40 per cent, danger debt, really danger debt. Much more expensive than most credit cards.”

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