ONE in three people will land themselves in debt by going on Christmas spending sprees this year.

The average family will run up a bill of pounds 850 to spread the festive cheer as far as possible.

But many will face a New Year financial headache as a result.

Over-spending is often caused by panic buying in the run-up to Christmas, so it's important to slow the whole process down. It is best to write a budget of who you want to buy for and how much you want to spend. Remember to take into consideration your usual December and January living expenses and bills, such as mortgage, gas and electricity payments.

Then work out what funds you have available, including salary and any Christmas bonus you will get.

If the figures don't add up, then now is the time to think about how you are going to raise the extra cash.

The average rate of an authorised overdraft is anything between 9.9 per cent with Smile, the internet bank, and 18.8 per cent with Barclays.

Make sure that if you do go overdrawn you have talked to the bank and have the debt approved - otherwise they will charge you up to pounds 35 every time you dip into the red and a further 30 per cent interest on top.

However, some banks will give more leeway. First Direct allows you to go pounds 500 overdrawn on certain accounts without paying a fee.

A total of 29 per cent of people buy presents on plastic - and some end up with a massive credit card bill at the end of festive celebrations.

If you cannot afford to pay it off, the debt will gather interest each month, sometimes at rates of more than 20 per cent.

There is still time to swap to a lower rate card. Capital One is offering zero interest for customers with a good credit history - and Internet bank Egg also offers nil interest.

Also check how long you have after making the purchase before you have to pay back the money without paying interest - most companies allow 52 days, but some give much less.

And if you are going to spend a fortune on plastic, check if the minimum you must pay back is 3 or 5 per cent of the debt - this could make a big difference to your January payment.

American Express is offering two per cent money back on purchases until the end of January when it reverts to its normal one per cent rate.

If you spend pounds 800 on presents, drinks and going out this year, all on your Amex, you will get pounds 16 back - enough for an extra bottle of bubbly.