HERE is a cautionary tale for you. A student on a stag night in Dublin, wanting cigarettes and having spent the last of his euros, used his credit card to get money from a cash machine. Bad move.

When the credit card bill arrived on his doorstep in England, there was a foreign loading fee for the euros as well as a cash advance fee.

There was also interest charged from the moment he’d taken the cash from the ATM – interest charged at a much higher rate than if he’d just used his card to pay for the cigarettes.

Being young and dozy, he ignored the bills, which vanished in the general chaos of his flat.

When some months later he finally decided to wake up, grow up and open the latest envelope, he found – to his horror – that the bill originally for around £20 had grown to more than £300 and his credit card company were very keen to get their money back.

It would also have mucked up his credit rating should he ever need to borrow money or take out a mortgage.

Banks tend not to like people who don’t pay their money back.

Nationwide used to be famous for not charging extra when you used your credit card abroad, but from next month they will start charging fees for transactions outside Europe.

But it is frightening how easily a small debt can turn into a big one even in this country. A review of bank charges is currently under way after consumer groups felt that customers were unfairly penalised and many challenged the charges through the courts. Typical overdraft charges could be around £25 per month plus another £25 for any transaction. It doesn’t take long for that to mount up to something horrendous that some people despaired that they would ever be out of debt, often for something that started out as maybe only a few pounds overdrawn but ended up as thousands.

A new bank account from Halifax has come under fire because – although it pays you £5 per month if you pay in £1,000 – it also charges you £5 a day for an unauthorised overdraft.

As someone pointed out, you just have to forget about an annual subscription renewal and at the end of a year you could, theoretically be over £1,800 in debt. Ooops.

The moral of all this is:

■ Try not to go overdrawn
■ If you do, deal with it quickly.
■ Never ignore bills
■ Check your bank statement regularly
■ Pay bills promptly
■ Don’t use credit cards for cash withdrawals, especially abroad
■ Give up smoking