DEBT is like fire. Know what you're doing and it's a powerful tool, get it wrong and it burns-and sadly Britain in 2009 is a nation in FLAMES.

The blame is shared. Lenders have pushed debts like street dealers selling crack, governments have cheered overborrowing as it falsely boosts the economy, keeping them in power. And if you've borrowed more than you can afford, hold YOUR hand up too.

To protect ourselves, we must be DEBT-LITERATE. So with Christmas bills about to flood through letterboxes, it's time for a credit and debt crammer, full of rules that will SLASH interest by hundreds or thousands.

LESSON 1. Only BAD debt is bad

FORGET old-fashioned "all debt is bad" mantras. Need a home, want to go to university? You'll need to borrow. The key is understanding when it's right-ensure you borrow as little as possible, and that it's planned, justified, budgeted for AND affordable.

This is why credit cards are LETHAL. It's too easy to borrow to fill the gap in your income. If you've debts from willy-nilly spending, see it as a massive danger sign as it means you're spending more than you earn. Keep that up and you'll enter a DEBT SPIRAL with bankruptcy as the end result.

LESSON 2. Avoid lower repayments

DON'T listen to lenders saying "it's better because you pay LESS each month". It just means you're in debt for longer and pay MORE interest.

Nasty secured or consolidation loan ads on TV often promise one low monthly repayment, but really they'll spread your debts for YEARS, earning them buckets of interest and costing you a fortune.

Take a £5,000 loan at 10%. Over five years, it costs £1,300 in interest yet over 25 years, it's £8,600.

The worst culprit is credit card minimum repayments which keep you in debt. Pay the minimum and you only ever repay a tiny fixed portion of your debt each month, barely covering the interest. Incredibly, £3,000 on a high-street card can take 40 YEARS to clear if you only repay minimums. See how long it will take you with my special calculator at

www.moneysavingexpert.com/minrepayments .

LESSON 3. Lower interest is better

INTEREST rates are the price of debt. Lower rates mean more of your repayment clears the actual debt, rather than just servicing the cost of borrowing. With credit cards, aim for under 5%. Over 20% is horribly expensive.

To compare, check the APR (except on mortgages). It's not a perfect measure but a good indication. If those three letters are missing, BEWARE. Some car loans say 6%, but that's "flat rate" interest-costing the same as at least 10% APR.

LESSON 4. Shift debts

THE most important tool in the cost-cutting arsenal is a balance transfer, where a new card pays off your old debts, so you owe the new card, hopefully at cheaper interest rates.

Most famous are short-term 0% deals, the current longest being Virgin offering new cardholders 0% for 16 months with a 2.98% fee. Yet if you can repay more quickly, Abbey Zero and Ulster Bank cards offer 0% for six months without fee. More options at www.moneysavingexpert.com/bts

LESSON 5. 0% cards can cost more

DON'T automatically opt for 0% cards. They're only good if you can fully repay before the interest-free period ends, or are organised enough, with a decent credit score, to shift the debt to another 0% deal before it finishes.

Miss this switching date by even a couple of months, and all your 0% gain can be lost. Instead opt for special life-of-balance deals where the cheap rate's locked in until all your shifted debt is repaid.

Today's cheapest is Barclaycard giving new customers 6.5% life-of- balance. See www.moneysavingexpert.com/lifeofbalance for details.

LESSON 6. Don't consolidate debt

ALL consolidating means is that your debts are in one place-but the real aim is to have the CHEAPEST debts. Most consolidation ads are for secured loans, so if you can't repay they can take your house. Along with stretching debts over many years, these debts can have variable rates, meaning they can hike them often by as much as 50-100%.

So don't ask "should I consolidate? Instead ask "where will my debts be cheapest?" Often the answer is by shifting to several credit cards with cheap balance-transfer deals.

LESSON 7. You can't ask where to borrow

THERE is no such thing as a "where- to-borrow" debt adviser. You have to do it yourself. A bank's job is to sell to you, not advise. Independent financial advisers don't cover debts. Charity debt-counselling agencies only have power to help those already in the mire, not those seeking the best way. Internet resources are great, but ultimately it's a case of DIY.

LESSON 8. Cut interest WITHOUT new credit

IF your credit card applications are rejected, don't give up. The trick is to access hidden deals on existing cards. While most companies won't cut your rate, they will often allow you special cheap rates to shift debt from other cards to them. Barclaycard, for example, allows many existing customers to transfer debts to it at 6.9% for life. Call up and ask, then shuffle debts to where they're cheapest. See my guide at www.moneysavingexpert.com/ccshuffle .

LESSON 9. Repay highest interest rates first

DON'T try to pay off each card equally or focus on cards with the biggest debt. Devote spare cash to repaying the one with the HIGHEST rate and make only the minimum monthly repayments on everything else. After repaying the costliest card, move to the second highest debt and so on.

LESSON 10. Devil's debt

NEVER borrow on store cards which often carry vile interest rates above 25% APR. If they offer a 10% discount on first use, grab the card but pay it off FULLY so there's no interest. And if you have existing store card debts, transfer them to a cheaper credit card.

Don't be blue if you're in red

SADLY, debt can contribute to severe depression for many people.

But no matter how desperate it feels, there's ALWAYS a solution. It might not be quick or easy, but a path will emerge.

For those already in crisis, use a non-profit debt counselling agency such as the Consumer Credit Counselling Service (www.cccs.co.uk , 0800 138 1111), www.nationaldebtline.co.uk (0808 808 4000), or www.citizensadvice.org.uk .

If you're struggling emotionally, www.capuk.org can send someone to your home.

Their job is to help, not judge. Generally, they use debt management plans, IVAs or even bankruptcy, but done right, these options are not as scary as they sound. Many say they finally get a decent night's sleep after getting help.

TV money guru Martin Lewis is the creator of Consumer Revenge website MoneySavingExpert.com.

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