There's no need for Christmas to bring financial ruin. STEPHEN LEWIS seeks advice from the money-men on how to enjoy a debt-free festive season.

EVERY Christmas it's the same. You've vowed you're not going to get into debt the way you did last year - but the kids won't let up, there's relentless advertising pressure for a bigger, better festive season, and those buy-now, pay- later offers look so tempting.

So, as usual, you throw caution to the winds and hope that, when the bills do come through, they won't be quite as bad as you know they will. Result, as Mr Micawber might have said: misery.

It's not as though we're not already all in enough debt as it is, without Christmas to contend with. A recent survey by the Credit Services Association (CSA) - the official body representing UK debt collectors - revealed consumer debt in this country to be standing at a truly staggering £170 billion. The average household owes the equivalent of 118 per cent of its annual income, which is a pretty sobering thought.

So how do you navigate your way through this Christmas without storing up more debt misery for yourself next year?

Well, you don't have to become a Scrooge overnight. The CSA has itself come up with a plan to help you steer clear of Christmas debt.

"Like everybody else, we want everyone to have a wonderful Christmas," says CSA chief executive Kurt Obermaier. "But time after time, people are seduced into getting themselves into unmanageable debt positions, made worse by increased interest rates.

"By following our guidelines and taking into account some simple advice, consumers can avoid debt and the associated stress this festive season."

How to stay out of debt

1 Set a clear budget and stick to it. If you go in for a particular make and model of camera, for example, it's very easy to let yourself be talked into paying an extra £50 for a slightly better one with a few more knobs on, says CSA spokesman and past president Steve Lewis (no relation). And then there's that other model that costs £100 more, but is really so much better a deal when you look at what you get.... By the time you've bought all the presents on your list, says Steve, you could easily have spent £1,000 more than you bargained for.

2 Make a list of presents and don't be tempted to buy more. It is very easy to be tempted, admits Steve - but you'll regret it afterwards. Be strong.

3 Make sure you know what the credit balance on your card is. It is very easy to lose track, says Steve - and many cards will automatically let you go on buying way beyond your so-called limit. If you don't know how much you've already racked up on your card, make a quick call and they will tell you.

4 Don't be tempted by the numerous buy-now, pay later offers. There is no such thing as free credit, Steve says - so you may well be paying for that 'free' credit by paying over-the-odds for whatever it is you're buying. Don't forget, also, that when you sign up for a 'buy now, pay later' deal, what you're actually signing is a binding consumer credit agreement. If, subsequently, you find yourself unable to meet the payments and want an extension, you could find yourself paying punitive interest rates.

5 Offers that appear to be too good to be true, invariably are. Just use your common sense.

6 And finally....make your decisions and stick to them. You'll appreciate the New Year more if you do, says Steve.

Gray matters

York-based financial adviser Gerry Gray, of Grosvenor Financial Consultants, has his own tips on staying out of debt this Christmas:

By all means use a credit card, he says - preferably one of those that offers you six months of interest free credit if you transfer to it. Then make sure you pay off your bills within that time, so you pay no interest.

Don't waste money buying presents that will just end up being put in a drawer and forgotten about, because they're not what someone wants. Ask people what they'd like first.

You won't find many real bargains before Christmas - but there are plenty afterwards when the sales come around. So why not give someone a voucher instead? That way they can buy what they really want themselves - and get some great bargains to boot in the post-Christmas sales.

Updated: 16:41 Wednesday, December 03, 2003