The average graduate left university in 2005 saddled with £13,500 worth of debt, according to Barclays (source: Barclays Graduate Research, August 2005), a sum that is set to rise to as much as £33,000 by 2010. Graduates who are lucky enough to secure a job quickly are likely to find the early part of their working life is geared towards paying off debt. Thankfully, the majority is probably going to be made up of student loans. There is no rush to repay these as the interest rate is set to remain low, as it is linked to inflation, making it the cheapest loan you will ever have.

A "store card" is simply a credit card issued by a retailer. Originally many of these cards were operated as charge cards - you had to pay the full amount off each month - but virtually all of them are now credit card arrangements in which you will be given a credit limit and be required to make only a set minimum payment each month. Again like a credit card, most store cards offer interest-free periods of between 35 and 55 days. However, unlike a general credit card, many store cards are limited use cards since they cannot be used for making purchases at other shops.

If you are standing in a shop wondering whether you can really afford the price of the item you're looking at, who wouldn't weaken when the smiling salesman says he can take 10% off the price if you sign up for a store card? The sting in the tail of this story is the fact that many store cards have annual percentage rates (APR) of between four and five times base rate and are around a third as much again as standard credit card interest rates.

Not if you don't want it to! The card issuers would be only too happy for your store card to become a credit card, giving you more ways and places to spend and thus go into debt and make money for them. However, the law (Consumer Credit Acts 1974, 2006) prohibits the unsolicited sending of a credit token. This was the stumbling block to the botched launch of Marks & Spencer's &more credit card in October 2003. M&S Financial Services (MSFS) sent letters to store card-holders saying it was going to automatically replace store cards with the credit card unless they objected.

Store-related loyalty schemes may appear attractive if you often use the shop in question. However, they should not be a key factor in your decision-making process. For example, Marks & Spencer's "&more" credit card offers 1p cash back for every £1 you spend at the store and 0.5p a £1 for spending elsewhere. However, you have to use the rebated money in M&S. What does this mean in reality? That you would need to spend roughly £1,000 in Marks & Spencer in order to generate enough rebated money to purchase a pack of five knickers!

If you think you are going to have difficulty in paying your debts then the first thing you should do is get in touch with the card issuer to make sure they know your situation. There are several organisations that can help you organise yourself to tackle store card debts: Citizens Advice Bureaux give free, confidential and impartial advice on store cards. Details of your nearest bureau can be found in your local telephone directory.

The AER - Annual Equivalent Rate - is a notional rate that's generally quoted on interest paid on savings and investments. It purports to demonstrate what your interest return would be if the interest was compounded and paid annually instead of monthly (or any other period). If an account pays interest more than once a year, say, for example, monthly or quarterly, then the AER is calculated by adding each interest payment to the deposit and then calculating the next interest payment, compounding the interest. Thus, on accounts where interest is paid quarterly, the AER will be slightly higher than the quoted gross rate because of the compound interest earned on the interest paid during the year.

Affinity cards operate like ordinary credit cards. However, they will be linked to a particular cause, which may or may not be charitable. Some charities offer credit cards (the schemes are run by card issuers on the charities' behalf) that make small percentage payments towards charity funds each time you use the card. There may also be a donation to the cause when you take the card out.

Annual percentage rate is required by law to be quoted by every firm involved in the business of advancing credit or lending money. The annual percentage rate be only one of a number of interest rates you may see quoted. It is also likely to be the highest of them. Personal loans, credit cards, mortgages and overdrafts may all be quoted at introductory rates of interest that sound enticingly cheap. However, what the introductory rates fail to include are any arrangement fees you may be charged for loans and they also won't immediately reflect any higher rate of interest that your borrowings will ultimately revert to.

Applied or nominal interest rate is the rate of interest which the lender uses to calculate the amount you actually owe them. The applied or nominal interest rate will not be the same as the APR as it does not include all charges. Hence it will be lower.