Warning against credit card debt

Relying on credit cards and payday loans to pay for everyday living is an extremely unwise way to manage one's finances.

This is the view of director of CashQuestions.com Annie Shaw, who said: "I think it is a massive concern and I would send a warning to anybody who is thinking of doing it and beg them not to do it."

She noted that it is never a solution to borrow money to pay off debt, but observed that many people do fall into this "trap".

Instead, Ms Shaw advised, seeking debt help is the way forward, with good advice and planning to help cut down spending being the key.

However, it appears that a lot of customers have responded to being unable to access mainstream lending since the onset of the credit crunch by taking on more payday loans.

Founder of Money Magpie Jasmine Birtles said these have become increasingly "mainstream" in the past couple of years, but warned they should be avoided because of the high interest payments involved.

By James Francis