THE five main banks are encouraging the wise use of credit with the publication of a little booklet, Shopping for Credit, in which all the different types of credit are defined. It also gives advice on how to select the most suitable form of loan.

It explains very usefully, how the credit rating and scoring system works, how APRs are defined, and the protection facilities that are in place should anything go wrong, such as the Office of the Director of Consumer Affairs, the Office of the Ombudsman for the Credit Associations and the 1995 Consumer Credit Act. It includes a personal budget planner and a typical loan application which, under the Act, must include warnings about the possible effects of not meeting repayments.

Between 1990 and 1995 the licensed banks alone had extended £5.6 billion in personal credit. A section in the booklet is devoted to coping with debt and lists agencies which are there to assist those with debt problems.

These include the Money Advice and Budgeting Service, which has 40 centres nationwide, and the Financial Information Services Centre, a voluntary assistance service provided by accountants which often work through Citizen Information Centres.

Shopping for Credit is available free of charge at any branch of the five main clearing banks AIB Bank of Ireland, National Irish Bank, TSB and Ulster Bank.