1. Don't make the common mistake of looking only at the monthly payments required under a credit agreement. Work out the total amount payable over the term of the loan – bearing in mind that with some loans you may be paying a variable interest rate.
2. What seems like a good deal can have hidden costs. For example, reduced monthly minimum payments or ‘payment holidays‘ result in significantly larger total payments. And store cards may seem like a convenient way to pay but some of them charge a rate of interest of over 30% a year.
3. Interest-free credit may seem like a good idea, but make sure you repay the full amount before the free interest period expires. Even if you are only one day late, you may have to pay interest on the total cost from the very moment you bought the goods.
4. Think carefully whether you need the optional insurance to cover your payments and make sure it really is suitable for you. This can be highly expensive and add massively to your loan and may not be worth the paper it's written on.
5. Extended warranties can be poor value. Research has shown that the cost of a repair is likely to be less than the cost of an extended warranty. You may also be covered under consumer protection legislation.
6. Think twice before taking out a consolidation loan to manage other debts. You may be able to arrange to pay back existing debts over a longer period of time - at less cost and less risk than a new loan.
7. Make sure you know the difference between secured and unsecured lending, and don't put your home at risk unnecessarily.
8. Do your homework. Spend time shopping around, researching what's on offer and getting advice - the internet can be a useful resource for this. You may think it will take too much time when you need a loan quickly, but if you skip this vital part of the process, you could be paying the price for years to come.
9. If you can afford to pay for your goods outright, don't be persuaded to take out credit unless it really does work out cheaper or better meets your financial plans.
10. Don't be intimidated by money matters. Take an interest in your finances and keep track of how much money you have coming in, and how much you have to set aside for essential bills. You can become well-informed by reading money pages and listening to personal finance programmes.