The money-saving expert has urged people to be cautious about applying for new cards and explains how damaging it can be ...

Martin Lewis has issued a new warning to anyone thinking of applying for a credit card.

It comes as many of us struggling with the cost of living crisis look to apply for an interest-free credit card, perhaps as a spending buffer or to transfer a balance from a credit card with a higher interest rate.

However, Martin says we should proceed with caution.

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He said it's critical to be aware that applying for too many cards will damage your credit score. And if you submit too many loan applications quickly, a bank can view you as a dangerous borrower with a credit issue, and turn down applications. This could leave you with a bad credit rating.

But, there is a way to avoid this, which is welcome news to us all.

'Check your chances first'

The money-saving expert advised borrowers to apply for a free 'soft-check' eligibility calculator first, which will show how likely you are to be accepted for a deal before applying.

'Almost every credit application goes on your credit file,' he said in his latest MoneySavingExpert email.

'The system is effectively anti-shopping around, as get rejected or a worse rate than advertised, and you’ll need to apply elsewhere, but too many applications, especially close together, is negative.'

He stressed that eligibility calculator searches do go on your file, however only you can see them, lenders can’t, so it doesn’t impact your 'future creditworthiness.'

Martin said the eligibility calculator gives you a really good idea of which cards you will be accepted for – and which cards you won't.

However he said even if it's a low chance of acceptance, it doesn't mean you definitely won't be accepted.

He added: 'For instance, if it states you have a 20% chance of being accepted, this translates to 2 out of every 10 applicants. You might be one of those.'

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Get pre-approved before you apply

The MoneySavingExpert website has its own calculator to check if you would be eligible for certain credit cards.

Some cards now give 100% acceptance chance – meaning you’re pre-approved to get them.

Some of the providers the website searches include Barclays, Sainsbury’s Bank, Halifax, Post Office, TSB, HSBC, Santander, Natwest, M&S Bank, and Lloyds Bank.

Martin advises using credit cards to transfer balances if you have debt elsewhere with higher interest rates, and also has a handy tip to help prevent you spending on a card intended to help clear debts.

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