Obviously the best advice is don’t get into debt in the first place. If it’s a bit late for that nugget of wisdom then you need to pay as little interest as you can while you are paying off your debts (which clearly you will be doing as quickly as possible). Consolidating debts is one way of doing this that might be right for you. What I am talking about here is stopping using three or four credit cards plus an overdraft plus a bank loan plus other borrowings. It is possible to consolidate all of them into one loan, tear up the cards (as if – you need industrial strength scissors, and here speaks a man who has cut up many a credit card) and pay off the overdraft. And yes I do understand the ease and usefulness of a credit card but don’t forget that good old stand-by – cash.

A word of warning, however, if you do consolidate your debts: make sure you aren’t turning short-term debts into long-term debts. The idea is strictly to pay off debt quickly.

If you do decide to consolidate your debts, here are some useful tips:

• I have a friend who wrote to all his creditors and offered them an immediate payment of 50 per cent if they would write the debt off – this included all his credit card people. Surprisingly every single one of them said yes and he took out a bank loan and paid them all off without having to declare himself bankrupt. He thus consolidated his debts and reduced them by half. Brilliant.
• Never ever respond to any adverts from companies offering to consolidate your debts for you – those ads are for people with more money than sense.
• Shop around for any pay-off loans – don’t accept your bank’s just because it is your bank: they may not be the cheapest by a long way.
• Don’t secure anything against your home, ever, under any circumstances. If you do, you could lose your home if you don’t keep up repayments. Is anything worth this risk? I don’t think so.
• Check the small print regarding early settlements and make sure you aren’t going to be penalized if you settle early.
• Only ever take out one loan to consolidate and only do this once – learn your lesson and move on.
• Pay off as quickly as you can afford – the longer the term, the more you’ll have to pay in interest.
• If you must borrow, borrow against an asset you can resell (machine tool, delivery van) and try not to borrow more than the resale value.
• Buying on credit is a bit different. When Jack Cohen started Tesco he negotiated the rent for his shop to be paid three months in arrears, he paid for his stock three months in arrears, and started taking money over the counter on day 1. By day 90 he had taken a lot more than he owed.