Britons are generous, spontaneous and fond of their holidays. That’s the picture that has emerged from a recent survey of spending habits, commissioned by Visa. Ten per cent of us spend most of our disposable income on gifts, lavishing presents worth an average of pounds 589 a year on others.

The vast majority of such gifts are bought on the spur of the moment. About a fifth of our spending money after necessary outgoings, such as bills and mortgage payments, goes on holidays. Then the gender divide kicks in: men spend their money on eating and drinking; women spoil themselves with clothes and accessories. The Visa survey and separate research by Morgan Stanley and Halifax into credit card spending have revealed similar heartening trends. According to Visa, roughly half of Britain’s consumers are organised and disciplined, setting themselves a budget (and sticking to it) when they go shopping. Morgan Stanley found that - despite the fact that credit card spending is set to rise by 45 per cent over the next three months - most consumers expect to be able to pay off their balance in full at the end of each month. These expectations are confirmed by Bank of England figures, which show that the consumer debt burden is easing slightly: in January, consumers paid off pounds 295m more than they spent on their credit cards. However, when it comes to managing debt and spending, there is still room for improvement. For while half of us tend to budget, the rest simply head to the high street with no advance planning whatsoever. It comes as no surprise that the guilty parties tend to be the young: those aged between 16 and 24 are least likely to stick to their budgets and check till receipts against bank statements and credit card bills. While it may be tempting, particularly when you are young and carefree, to throw bank statements into the bin without looking at them, you are likely to be storing up trouble.

The best way to stay out of the red, advises Visa, is to take a leaf out of the Chancellor of the Exchequer’s book and exercise prudence. Working out an annual budget is a relatively simple way to keep a handle on your finances. If accountancy is not your strong point, you may find it helpful to download a budget planner from the British Bankers’ Association website (www.bba.org.uk). Tot up your income, from earnings and investments, net of tax. Add any other payments, such as tax credits or other benefit payments. Set against this your mortgage or rent payments, credit card debts and other loans, pension payments, life assurance contributions, insurance premiums, utilities, travel expenses and food bills. Once you have balanced your annual budget, you can divide it into a monthly plan, marking those months on which annual or quarterly bills are due to be paid, so that you can put aside extra cash from other months to cover these additional costs.

What you have left over, if anything, once you have covered essentials, is your disposable income, that part of your money that you can fritter away on gifts, expensive shoes, football tickets or foreign holidays. If there is not enough left over to fund a weekend in Bognor, never mind a week in Spain or Italy, you will need to readjust your outgoings. A good way to do this might be to re- examine how you pay for things. Paying utility bills by direct debit is one way of saving money, since many gas, electricity and water companies offer discounts for direct debit payments.

According to the Visa survey, more and more Britons are using cards, rather then cash, to pay for their spending sprees. Marc O’Brien, vice- president of Visa, says: “UK consumers are increasingly turning to the convenience of cards as their preferred means of payment. Debit cards are growing even faster in popularity than credit cards.”

This is a positive trend. So long as your account is in the black, using a debit card costs nothing. Meanwhile, Morgan Stanley has found that just under two-thirds of credit card users pay off their full balance each month. But for the remaining 40 per cent, choosing the right credit card is essential.

UK credit card holders could collectively save millions of pounds by switching from the more expensive credit cards offered by many high street banks and retailers. Despite the fact that it is possible to get long- term rates starting at 8 per cent, the average borrowing rate remains high, at around 18 per cent. To find the best rates, consult an online financial information provider such as Moneyfacts.co.uk or Moneysupermarket.com.

Those who tend to use debit cards for most of their expenditure should make sure they have the best current account for their needs. Prudent spenders whose accounts are usually in the black should opt for accounts that pay higher rates of interest while the account is in credit. Cahoot, for example, pays 4.1 per cent on balances in credit, while Zurich Bank pays 3.5 per cent. In comparison, high street banks such as Barclays and Lloyds TSB pay just 0.1 per cent interest on current account balances.