You could be forgiven for being confused by the three types of plastic you are likely to find in your wallet or purse. However, only one offers credit in more than the short term. A debit card will be linked to your bank account, usually your current account. The cost of anything purchased with this card or any money withdrawn from the bank will be taken from your account more or less immediately. You might find it easier to think of a debit card as a plastic cheque! If you use a charge card, you may make purchases and in some cases withdraw cash using the card, "charging" these costs to the card account. However, you will be required to settle in full each time you are sent a statement of the account, usually monthly. Even so-called cheap credit cards, on the other hand, are a form of potentially open-ended borrowing. The card issuer will set you a maximum credit limit and you may spend as much as you like up to that limit, provided that you pay a minimum amount off each month.

The main reason to have a store card, which is just a credit card issued by a particular retailer offering credit in its chain of stores, is if the retailer does not accept other credit cards. In general terms you should be wary of store cards, they can and, in some cases, do charge up to a third as much again in interest as ordinary credit cards.

Most credit cards will stipulate a minimum payment of £5 or a small percentage, say 3% or 5% of the outstanding balance on your credit card account. Beware that some credit card issuers stipulate an even lower minimum payment of just 2.25% or the total of charges (interest, insurance, handling fees etc) plus £5, whichever is lower. This is not a way for you actually to save money. Obviously, the less you pay off, the more interest you are charged.

The answer to this question is "Yes" but for some people they can be a far too easy way to borrow and, ultimately, a very expensive one. Annual interest rates of more than three times the current bank base rate are by no means unusual among the big names among credit card issuers.

This can be very confusing, especially when you are trying to decide between competing offers from credit card issuers. You may see as many as three or four different interest rates quoted for each card. First of all, you will be charged interest each month on the outstanding balance on your credit card account. Typically (as of May 2007), this monthly interest charge will be between 0.75 and 1.5 per cent, giving us an annual interest rate spread of 9 to 18 per cent (there are both cheaper and more expensive cards around but most fall within this broad range).

Credit card issuers will tell you that a gold credit card is indeed one of the best credit cards to have - a status symbol that says something about you. In reality, all it says is that you are probably earning more than the national average wage and that the issuer has decided you are a better than average credit risk.

There are literally hundreds of different cheap credit cards on the market (and some not so cheap!) with a variety of terms and conditions. However, a large percentage of them actually operate through just two international credit card businesses, VISA and Mastercard, and it is these logos that you will see on your credit cards and in shop windows.

Cash withdrawals, even on otherwise cheap credit cards are usually more expensive than store purchases. Many credit cards will charge immediate interest on cash advances even if they do not do so on purchases. In addition, you may find a transaction fee of up to £5 has been deducted from your credit card account for a cash withdrawal.

First of all you should look to make sure that you have a credit card which does not start charging you interest from the date of the transactions you make on it. The best credit cards will offer you an interest free period before you need to make your payment, providing that you play the system properly. Do be wary of allegedly cheap credit cards marketing lower rates of interest and lower annual fees. Check when they actually start charging interest. They may end up being more expensive because you are paying interest from the moment you use the credit card.

Are you likely to pay off your bill in full each month? Be honest! If the answer to this question is going to be "Yes" then you should look for one of the really cheap credit cards with no annual fee and which has a long interest-free period. You may, however, prefer to pay an annual fee in exchange for some kind of freebie, whether it be, for example, "Air Miles" or collectible points and you are going to spend a lot of money.