Think about whether you can avoid using credit.

If you can pay cash instead, you’ll save on interest, fees and charges. You can also save if the retailer is willing to bargain and drop the price for cash purchases. It can pay to wait and save for the purchase rather than using credit. If you don’t mind waiting, another option is to buy things on lay-by.

If you are going to use credit, it pays to do your homework. Whether you are thinking about getting a credit card, personal loan or a mortgage, shop around for the best deal on interest rates, fees and charges.

Payday lenders (also called fringe lenders) typically charge a lot more to borrow relatively small amounts of money over short time periods. This payday loan (or cash advance) is a short-term loan to cover you until your next payday.  Be wary of loan advertising that says how easy it is to borrow but doesn’t say what it will cost. Be especially wary of advertising that attempts to sell a particular loan as a way out of your money worries - look out for this type of advertising just after Christmas.

It is possible to take out loan insurance when you get a personal loan or mortgage. This can cover your repayments if you lose your job, become seriously ill or die.

Your lender may offer loan insurance, but try to compare prices as you may be able to get cheaper cover from an insurance company.
Before using credit, also think about the pros and cons of credit, and the cost of credit.