Although the recession has technically ended this does not mean that all is well, debt counsellors Octogen said on Wednesday

"The consensus opinion is that rates should not reduce further during 2010, and some economists are in fact forecasting a rate hike or two," Paul Slot, director of Octogen said in a statement.

"Additionally, consumers will have to deal with increases in costs such as electricity, other utility charges and education."

He said although the effective cost of borrowing had come down by a third, this did not mean that consumers should revert to borrowing the maximum they could.

"The local economy may have come out of recession but economic conditions will remain tight for some time.

"Consumers must be highly responsible and conservative when borrowing ? an approach which should ideally be adopted in all types of economic conditions," he said.

The lower interest rate environment should be seen as an opportunity to increase debt repayments and pay off debt quicker ? rather than gearing up again.

He said many consumers might be feeling vulnerable after a December spending spree and might want to borrow to make it through to January payday.

"This should be a last resort and if essential, should be done with full consideration of all consequences.

"If a consumer needs to borrow, there must be a convincing case for increasing their debt profile."

The borrower should be absolutely clear about how they would meet the additional debt repayments.

"Maximum deposits should be paid wherever possible and the shortest repayment periods are preferred as total interest charges over the loan term are then less."

He urged consumers to ask about all additional charges - such as compulsory credit life insurance, upfront initiation fees, the interest rate and monthly service fees - and evaluate the total cost of the loan and its all inclusive interest rate.

"A few credit providers should be sought out and comparisons made in order to choose the best option."

Consumers who were already over-borrowed and struggling should not take on new debt, and should rather be talking to their credit providers about revisiting repayment terms of existing debt.

"We also advise that consumers never attempt to hide the true state of their financial affairs when completing credit application forms."

This could mean forfeiting certain legal rights ? for example, those afforded to borrowers by the National Credit Act in cases where lenders have engaged in reckless lending.

"Ultimately we should all aspire to being debt-free and set a time frame for this.

"We should commit to a financial plan and to moving into a position where we have adequate savings."

However, he pointed out debt was a normal part of living and it could enhance lifestyles if used wisely.