Overdraft debt creates ‘endless cycle’

The study from independent price comparison website, uSwitch.com, found that a fifth of 18 to 29-year-olds are permanently overdrawn, while 11 per cent of the population overall are in such a state.

According to the survey, a third of those who use their overdraft rely on the facility to pay off other debt, “indicating an endless cycle of borrowing” said the website.

Nick White, head of personal finance at uSwitch.com, commented: “It will come as no surprise that the nation’s 18-29-year-olds show the most relaxed attitude towards debt – and place the greatest reliance on it as a means of paying for life’s essentials.”

He urged consumers to avoid living off their overdraft or at the very least, shop around for banks with more competitive overdraft rates.

Mr White also called on people to break their “credit habit” lest they become trapped in the cycle of borrowing and debt.