How to borrow at 0%, ie, no cost (or as close to it as possible) – Martin Lewis's cards, loans, buy-now pay-later and overdrafts masterclass

Overdrafts: Get 0% borrowing and £100+ towards it

Best used for borrowing up to £500. Overdrafts are usually a terrible way to borrow (there's a but coming). They've become one of the most costly forms of mainstream debt as most now charge a hideous 40% APR - far more than credit cards.

Now time for the but... but, currently there are two bank accounts that pay switchers £100+ and offer 0% overdrafts. So you can use the switch incentive to reduce the debt and the rest is free. It's tricky to do it right, but if you can, this is unbeatable for small borrowing.

Here are pros & cons ONLY for those overdrafts (not overdrafts in general):

✔️ Pros: Interest-free, so no cost | Free cash to clear the debt quicker | Regulated - so can complain to the ombudsman if you've problems

❌ Cons: VERY easy to overspend and overborrow | Repayments aren't fixed, so easy to underpay | No Section 75 protection | Expensive, 40% interest if you go beyond the 0% limit | Not everyone can get one

The current top deals: There are two out there:

- First Direct free £100 plus a £250 0% overdraft*: Switchers currently get £100, and many get an ongoing £250 interest-free overdraft (40% EAR above that). If your borrowing's under £350, this is therefore a cracking deal as the £100 will clear some debt and the rest is interest-free. See First Direct's eligibility criteria first to see who can get it.

- Nationwide FlexDirect free £100+ & 1 year 0% overdraft: Switchers get at least £100 and often a year's 0% overdraft. The overdraft amount depends on a credit score, but for some it can be larger than First Direct - though it's worth using its own eligibility tool to get an indication before you apply. After a year it's 40% EAR, so ensure the debt's cleared by then. See Nationwide's eligibility criteria first to see who can get it.

Key rules: This is a great system in theory, but needs careful control. Treat specific overdraft borrowing like a loan. Don't use it for willy-nilly borrowing.

Try and repay a set amount each month, eg, £50 (ie, you should start the next month with a £50 smaller overdraft than the one before). If you don't have the discipline to manage that, then don't do this. If you already have an overdraft, there's more help in Slash your overdraft costs.