One in five pay bills with credit card
So what is going on, and what can you do if you are in this position?
The survey, by discount website hushhush.com, also found that 64% of people have at least one unpaid credit card or loan. Even more worryingly, 17% of respondents admitted that they'd taken out payday loans in the past to pay household bills, whilst 28% also said that they frequently borrow from friends and family to pay for necessities such as groceries and regular bills.
Why?It's hardly surprising. The Labour Party estimated that the average person has taken a pay cut of £1,200 since the election, through pay cuts and freezes, and those who lose their jobs and take a lower-paying one elsewhere. Meanwhile, Bacs says that household bills are up 40% over the last five years - so that 25% of people say they are unable to make the finances stack up.
Slippery slopeThe trouble is that trying to solve the problem with credit is a slippery slope. These sorts of easy credit seem like a solution in the months when you can't quite make it to payday. However, once you have started to close the gap with credit, it's easy for that to spiral out of control, and because you're adding interest onto your costs, your money starts falling further and further short every month.
When asked if they knew what rate of interest they were paying on their credit card or loan debts, just 31% of people said they did. It means there's a good chance people are entering into very expensive arrangements to tide them over - which will only lead them into more and more trouble.
What can you do?The solution will depend on how far down the track you have travelled. If you have built up a small amount of debt on your cards, you can switch it into lower interest forms of borrowing, cut up your cards, and draw up a severe budget which will enable you to pay it all back and start again.
Once you are back to zero you can look at the long-term lifestyle decisions you can make in order to cut your costs. If the shortfall is small you may be able to meet it by stopping subscriptions, removing certain luxuries for now, and shopping wisely and sensibly. If it is bigger, you may need a complete rethink about where you live and how you live, and whether you can afford your lifestyle.
If your problems are more severe you may need to set up a debt management plan. You should use a charity like Citizens Advice for this - you definitely should't be paying fees to a private company. They will be able to negotiate terms for you to repay the cash - and for interest to be stopped in the interim. It will affect your credit rating, but it will bring you back to zero.
In some cases things will have got even worse and you will need to look at an insolvency solution like an IVA or bankruptcy. These will not wipe away your problems instantly, but will enable you to break your debts down to something more manageable. There will be a long-term cost, but if things have got really bad it may be your best option.
The best place to start is to speak about your own situation with an expert. Mark Pearson, founder of HushHush.com, says: "The Citizens Advice Bureau can help people manage their spending better and negotiate with debtors on your behalf, so if you really can't see a way out, they might be a good place to begin."