Credit card debt: A survival guide

You're enjoying a blow-out summer, or the car unexpectedly packed up, or somehow you accidentally put the new kitchen on plastic. Whatever it was you now owe an unwieldy amount on a credit card – maybe more than one.

You're hardly alone. The latest data from The Money Charity suggests that with more than 460 transactions on plastic each second in the UK, every British adult owes an average of £3,680 on credit. In fact, overall, we each owe almost £780 more than we did this time last year. So what are you going to do about it?

Can't I just keep paying off the minimum?

Not really, no. Around 60 per cent of credit card holders manage to pay off their full balance every month, but the remaining 40 per cent are being charged an average of almost 18 per cent interest a year. That's despite the record low Bank of England base rate of just 0.25 per cent.

For cards taken out after April 2011, the minimum monthly repayment is 1 per cent of the balance, as well as any extra charges or fees. And you could decide that sounds the most comfortable way of managing things. But the shock scenario is that if you borrowed £3,000 as you left university at today's standard interest rate, and repaid only the minimum amount, you'd still be paying it off on your 50th birthday. And it will have cost you £4,000 in interest alone. Just rustling up a few pounds more than the minimum can have a dramatic positive effect on your debt duration and interest charges.

But it must be OK, because the credit limit keeps going up?

This is a huge bone of contention right now, with debt charities urging the financial regulator to curb unsolicited credit limit increases that simply add to the misery of problem debt. For now, simply refusing the increase could save you some significant financial heartache.

So what can I do about it?

Plenty. The credit card market is all about ridiculously long interest free periods right now and its very easy to transfer balances. The best balance transfer offer out there right now is Virgin at 41 months Watch out for the balance transfer fee, which is the equivalent of 4 per cent of the amount you transfer, added to the debt. By dropping just a single month's worth of interest free debt though, you can significantly reduce the transfer fee you pay with Halifax's 40 month deal for a 2.46 per cent fee.

In fact, if the fee worries you most, Barclaycard offers up to 37 months at 0 per cent interest for a 1.5 per cent fee, or up to 32 months for a 0.72 per cent fee.

Tesco is even offering up to 24 months worth of interest free debt for no transfer fee at all.

However, if its the longest possible period of low interest debt you're after, the best buy right now is MBNA, with a 0.5 per cent balance transfer fee and a whopping 60 months period charging only 4.9 per cent.

Even if your credit rating is less than perfect, you don't have to simply put up with punishing interest rates on credit card debt. For poor credit scoring customers, the top choice is from Barclaycard – offering 18 months of interest free credit for a balance transfer fee of 2.99 per cent.