Britons should make it their New Year's resolution to cut up expensive store cards and switch loans, overdrafts and other card debts to cheaper alternatives, say financial experts.

Price comparison website Moneyfacts said thousands of consumers paid over the odds for their borrowing whilst at the same time receiving "measly returns" on savings and current account credit balances.

"The lethargic stance taken by people who are prepared to stay loyal to a financial provider, no matter how poor the deal they are getting, can prove an expensive mistake," said Moneyfacts spokesman Andrew Haggar.

The difference in interest paid by mainstream providers on their instant access savings accounts could vary be as much as 4.16 per cent, Mr Haggar said, meaning that an investor with £2,000 in savings could earn £100 more each year in interest simply by switching provider.

Store cards offered by Burton, Oasis, Toys R Us and Bhs each charge an annual rate of at least 29 per cent.

However, applying for cheaper credit was not necessarily a straightforward process, Stuart Glendinning of financial comparison site Moneysupermarket warned. Ninety-three per cent of loan providers advertised "typical" loan rates that were not available to everyone, he said.

"Consumers would be wise to check they will benefit from a good rate before switching over debts," said Mr Glendinning.

However those with credit card balances and overdrafts of £5,000 with high street banks could save more than £600 in the first year in interest payments alone by switching the debts to one of the cheaper loans on the market, he claimed.

Indeed banks could face curbs on the way they sell credit cards and loans following concerns from the industry watchdog, it has emerged. The move follows worries from the Banking Code Standards Board that banks were not going to sufficient lengths to ensure consumers could afford repayments when they advanced them further credit.

The board said an inquiry launched this year into the way banks sold unsecured debt had found very few clear breaches of the banking code.

But it said this probably reflected more the ease with which sales processes could be compliant with the current code and its accompanying guidance rather than good quality lending practices.

The board is understood to want to strengthen the guidance that goes with the voluntary code in an attempt to make banks adopt more responsible lending practices.

It is thought specific proposals will be discussed at a board meeting on January 11.

Britons now owe more than £1 trillion in mortgages, loans, credit cards and overdrafts, and there have been concerns that banks may have been fuelling the borrowing spree by making it too easy for consumers to take on more debt.

As part of its investigation, the board looked at the sales practices of 12 UK banks and credit card operators, examining cases where people had run into problems within 12 months of taking on new debt.

One of the main areas of concern it identified applied to debt consolidation loans. The board found that in some cases banks lent people money to consolidate existing debts, but did not make sure consumers used the money to repay or reduce their outstanding borrowings.

They also failed to talk to borrowers about their ability to take on further debt.

It found that loan terms often reflected borrowers' ability to afford the debt, rather than the purpose the loan was being taken out for, with seven-year loans taken out to pay for holidays in some cases.