There are certain things in life that you will wish to avoid if you want to have a secure financial present and future for yourself and your family. Credit card debt is certainly one of those things that you should be avoiding. People do not always realise or think about it but keeping an outstanding credit card balance is one of the most expensive financial arrangements you could possibly subscribe to. If you have even an average interest rate, and not too much of an outstanding balance, you could be wasting literally hundreds of pounds a year by not paying off your outstanding balance in full each month.

There are also other problems with keeping a high amount of credit card debt. You will be making your credit rating worse for one thing. And this is something that you should be concerned about. Credit providers, banks, insurance companies and even employers will use your credit rating as a means of assessing your financial standing. If you have a very high outstanding credit card debt, or are close to your credit card debt limit, this will be regarded as a negative in the assessment of your credit score and for this very purpose, it is something that you should be attempting to avoid.

A lowered credit rating will cause you to receive worse terms and offers for future credit. For example you may get:

• Higher interest rates
• Less favourable terms
• Lower credit limits
• Refusal of credit

If you wish to avoid one or more of the above out comes, you should be trying to keep your credit card debt under control. One way to do this is to simply stop using them. Discipline yourself, or if this is too difficult, take the credit cards that you are using, out of your wallet or purse, so that you cannot give in to the temptation of using them. This way, the amounts you pay back will start to reduce your outstanding balance and you will get things back under control.

Another thing you should be making sure that you are doing is repaying more than the minimum repayment on your monthly bill. Many cards allow you to repay just the interest, and if you are doing this, it means that you are repaying none of the actual outstanding balance each month so even if you stop using the credit card, you will not be paying them off. You are simply servicing the debt. You should make sure that you are paying back the credit card balance over a reasonable period.

YOU want a personal loan. You rate yourself a typical borrower (and spender) - so that means you will be offered the loan at the advertised typical APR, doesn't it?

Er, no, not guaranteed.

You may have scoured the best buy tables for the lowest APR on a personal loan, but rest assured that such a rate is not available to all applicants.

There are more than 30 loans with an APR of less than 7% presently up for grabs.

But how does your credit rating stack up?

And have you factored in the financial impact of early repayment penalties and the cost of payment protection insurance (PPI)?

Certainly, a personal loan can make better sense than credit card borrowing in coping with Christmas expenses (last year, it has been calculated, over 50% of the UK population spent more than their monthly income over the festive season).

Bear in mind that because of rule changes by the Department of Trade and Industry earlier this year, lenders have to provide clear information upfront, enabling cost comparison.

Before you sign on the dotted line you should know: the total amount repayable over the loan's term; the frequency of repayment; such things as default or early settlement charges; and the annual percentage rate.

In addition, where a firm touts the term 'typical APR', that means it must be offered to two thirds of successful applicants.

So every third successful applicant could draw the short straw of risk-based pricing, whereby credit history is scrutinised and leads to the offer of a loan at a more expensive APR.

That is assuming you are offered the loan at all. Many lenders offering low rates cherry-pick their customers.

You may be tempted to achieve a better APR by switching an existing personal loan, but do the maths.

There might be cash inducements to switch, apart from the lower interest rate (some personal loans can be around 15%, so an advertised 7% is appealing), but will you face a hefty penalty by paying off your existing loan early?

Finally, beware the iniquitous payment protection insurance (PPI). This can torpedo a headline APR with devastating impact.

Morgan Stanley has estimated that PPI can effectively push up an annual percentage rate of 7.9% to 23.6% on a £10,000 loan.

Ironically, many borrowers sold PPI are not eligible to claim under the exclusion terms of the policy. PPI should be optional.

If it is insisted upon or you want peace of mind then go to a specialist provider where premiums will be less expensive and can be paid monthly rather than upfront, as some lenders demand.