But the truth is more and more people are sinking into a spiral of debt thanks to years of financial strife and an ever-growing cost of living, so it's important to know exactly what you're getting into before you apply for credit. Here are five credit traps it may pay to avoid and why.
Short-term and payday loans have been making big and largely unfavourable headlines in recent months, thanks to their exorbitant interest rates and borrowing 'extensions'. Despite the Financial Conduct Authority (FCA) recently proposing a series of tougher regulations to protect consumers, there is no limit to the rate of interest these lenders can charge, and late payment fees and charges can quickly cause a debt problem that's tough to get out of.
For example, Wonga allows customers to borrow up to £1,000 within mere minutes, but with a transmission fee of £5.50 and a representative APR of an astonishing 5,853 per cent, you'll repay a total of £183.49 if you borrow £150 for 18 days. What's more if you're late making the payment, you'll be charged another £30. If you're having cash flow problems, consider whether you'll be that much better off the following month. If not, you could end up saddled with even more debt and the worry that goes with it.
When high ticket items go wrong or break, weekly repayments can seem like the only way to replace them. But weekly payment stores usually come with high interest rates that mean you might be better off saving up.
As an example, the standard APR on Bright House products is 64 per cent, adding a sizeable sum onto that big screen TV that you could save by shopping around or turning to hire purchase. To make matters worse, many of these payment stores don't perform credit checks, which can lead those already struggling into more and more debt, and some have a reputation for heavy-handed debt collection techniques should you start to miss payments.
If it is at all possible, try to save for the bigger items or look for hire purchase deals from reputable retailers.
The credit crunch also saw a resurgence among high street pawnbrokers and a whole host of 'cash for gold' adverts hitting TV screens, and such lenders are becoming increasingly popular for those with poor credit. However, consumer group Which? found that many of these firms are paying a fraction of what your valuables are actually worth.
It was a similar story when it came to pawnshops, which typically pay a maximum of 50 per cent of the real value of items, and then charge interest while you gather the cash to buy them back. Furthermore, there's always the possibility that you'll lose your possessions if you can't repay what is effectively a loan.
A quick internet search for 'bad credit loans' will throw up a wide variety of companies claiming that a poor credit history is no barrier to borrowing. Don't be fooled. The vast majority of these firms are credit brokers and charge an 'administration fee' for their services in finding a lender to provide you with the cash you need.
Be warned - all too many British consumers have been sucked into this trap and paid the upfront fee (typically between £50 and £70) only to find that no loan is forthcoming. What's more, should they provide finance, you're likely to pay high interest rates that could pose a problem when it comes to repayments. Simply put, if you are asked for money upfront, just say no.
Many a shopper has been lured into getting a store credit card, tempted by the prospect of saving 10 or 20 per cent of their purchase. Retailers make it easy to sign up to these credit accounts, and there's also the attraction of paying for your goods at a later date.
Unfortunately, putting off your purchase means you are being charged interest, often at what would normally be an off-putting rate, so the 'savings' are rarely much cop. The real danger of these store credit options, however, is the temptation to carry on spending. Before you know it, you've run up a hefty bill and if you can't pay back the full amount at the end of the month, you're hit with late payment fees on top of the interest. If you can't afford it at the time of purchase, don't buy it.
If you are struggling to cope with your debts, it is always worth speaking to either your bank or a free advice service such as the National Debtline for help and support.
Have you fallen victim to any of the above credit traps? Tell us about your experience below...