James Walker: Take action if January's pay packet won't stretch

January sucks, doesn't it? It's cold outside, everyone's ill, we're back to work with no holidays in sight and payday is miles away.

Take action now if you are suffering a financial festive hangover.

January is especially difficult after overspending at Christmas or in the sales. We work through our pay packets a lot earlier due to holiday spending and expenses, which is why many of us are feeling the pinch now.

If you’re in that boat the last thing you need is a lecture – so just remember one thing. Check your accounts, work out if you’ve got enough cash to make it to payday, and if you don’t, contact the people you owe money to and ask for help before your payments bounce.

Your bank or credit provider should come up with short-term solutions to help you get out of the cycle of bounced payments you may find yourself in. Being realistic helps – they aren’t going to wipe off money that you’ve spent. But they can remove charges and interest that are pushing you into the red and give you a bit of breathing space to get back on top of your finances. If they refuse to help – or make things worse – you have a legitimate complaint. Check out Resolver’s free complaint app and we’ll help you get it sorted.

It’s easy to slip in to debt these days thanks to all the sneaky credit products out there. You might not even realise you’ve signed up to high-interest borrowing. Here are a few things to watch out for:

 Store cards: If you took advantage of a 10 per cent off offer by taking out a store card over Christmas, pay it off asap. Interest rates can be over 40 per cent

 Catalogues: You might not think you’re signed up to a catalogue but if you’ve joined an online store that offers credit it’s exactly the same thing. High interest, complicated methods of paying, interest-free deals that end without announcement. Watch out!

 Credit cards: Those interest free balance transfers are starting to end now, so don’t assume you can swap your balance over. Beware of the transfer fees too – they can be more expensive that a fixed interest rate.

 Hire purchase: A massive 85 per cent of car finance deals are hire purchase, now rebranded as “PCP loans”. These deals are hugely complex so set a budget before you buy and don’t get talked into overspending.

 Short-term loans: Formerly known as payday loans, the industry has rebranded after years of bad publicity. The adverts are back all over TV and the products are everywhere. The interest rates may have come down from annual highs of 2,000 per cent but they’re still huge

 Point-of-sale loans: These are the credit agreements you take out when you buy a sofa or large purchase on credit. They’re often “buy now, pay later” deals – but watch out. The interest goes through the roof as soon as the interest-free period ends. And the lenders can be lax about letting you know when that happens.

If you’ve made the decision to face down your debts once and for all well done. But one word of warning. I hear many horror stories from people who’ve been sucked in by debt management companies. These businesses charge you to manage your debts while you make a single payment each month. Don’t use them – they’re a rip-off and they sometimes make things worse. You can tackle your debts using a free organisation like StepChange.

James Walker is the founder of online complaint-resolution service Resolver.co.uk