Consumer campaigners are calling for a crackdown to clean up the "irresponsible" credit industry after finding that a quarter of people who take out expensive payday loans are using them to plug other debts.
Which? said that "desperate" borrowers who find themselves locked out of mainstream credit are drowning in a vicious cycle of high-cost loans as they try to meet their daily living costs.
It found that 24% of people who said they take out payday loans were using the cash to try and pay down other debts they had taken out.
The consumer group said that half of people who used a form of high-cost credit such as a payday loan or unauthorised overdraft said that they had been rejected for credit within the past year.
Of the credit users Which? surveyed, the vast majority (78%) had credit cards while a third had authorised overdrafts and one in six had a personal loan. One in 16 credit users used payday loans and one in 20 had dipped into an unauthorised overdraft.
Which? said that some households are becoming increasingly reliant on loans just to get by and more than half (57%) of people who had credit-card debt were using their card to cover essentials such as rent and household bills.
Which? said the FCA should ban lenders from imposing excessive default fees and charges, toughen up on rules to make sure proper affordability checks are carried out and end unsolicited increases to people's credit limits by firms.
The FCA should also limit the number of times that high-cost loans can be rolled over, force firms to make fees and charges more transparent and step in quickly when borrowers are struggling, Which? said.
Which? executive director Richard Lloyd said: "For an increasing number of people, using credit to pay for essentials has become the norm. This has led to people being forced into a vicious cycle, taking out further, expensive credit to pay off existing debts."