Is a happy Christmas on the (credit) cards?

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When times are tight and Christmas is coming, it's tempting to turn to that little piece of plastic in your wallet and worry about paying the bills later. Research from CreditExpert, shows that almost one of five of us - that’s nearly ten million people - intend to do just that.

If you plan to be one of them, here are some tips that should help you to play your Christmas cards right and make it through to the New Year without building up a mountain of festive debt.

1. It's not free money

Because no cash changes hands, it's easy to fool yourself that spending on your credit card isn't like spending real money. It is. You do get a grace period before you are asked to pay back at least a proportion of what you’ve spent - it could be 40 days or even more - but you eventually have to repay what you’ve borrowed, just as you do any loan.

2. Choose your card wisely

A new card may seem like the answer to your Christmas shortfall. It can be, if you choose wisely. Start by looking at personal finance and price comparison sites to identify the best deals. Then check your credit report - the personal history of your credit accounts, such as cards, loans and mortgages.

If it shows that you don't miss repayments and aren't overstretched, you could be in with a chance of a zero per cent balance transfer or zero per cent interest on spending for a few months.

If your credit history is patchy, you may find it more difficult to get a new card or have to pay higher interest on your spending.

3. Pick a card and stick to it

Don't apply for several cards at once. Every application registers on your credit report and lots of them in a short period of time could make lenders think you are desperate, or even planning a fraud. Instead, ask for a quotation search, which won't be seen, then apply for the best offer.

4. Decide what you want to spend…

Sit down well in advance and draw up a budget before you hit the shops or the Internet - don't forget to include food, drink and transport costs. Look at this figure against your regular household budget and see how much you have to spare - or what the shortfall is. Then work out how long it will take you to repay your Christmas costs…

5. …and don't forget interest

If you're going to leave a proportion of your Christmas debt outstanding for a month or so, you'll pay interest on top of the amount you've actually spent. This is added to the outstanding amount, usually every month.

6. Understand minimum repayments

Be wary of repaying only the minimum, especially if your card offers a very low repayment threshold. It will ease your budgeting temporarily but means you could be paying for Christmas 2008 for months or even years to come. Always try to repay as much as possible if you want to minimise the long-term cost.

7. Never skip repayments

Don't assume that nobody will notice if you decide to skip a few monthly instalments on your card. Missed repayments stay on your credit report for three years and could make it harder for you to borrow – lenders check your report whenever you apply to them and could believe you're unreliable. Better to make the minimum repayment than nothing at all.

8. Talk to your card issuer

If you're concerned that you may not be able to keep up with repayments, tell the card issuer at once. Then they can work with you to find a schedule of repayments you can afford, without damaging your credit status.