A quarter of those polled plan to use a “buy now, pay later” offer to manage costs this January and one in seven said they will use payday loans to get through the month.
Among those who said they think they will be in debt by payday, the average amount was expected to be £624, which respondents predicted would take them around three months to pay off.
It comes at a tricky time for thousands of credit card borrowers who have recently received letters informing them of tighter rules for people in persistent debt.
All banks are currently responding to rule changes by the City watchdog designed to help those who are paying more in interest and charges than the debt they initially took out.
But campaigners have warned that “inconsistent” communication about the changes could leave consumers with an unexpected request to make larger payments.
The FCA introduced rules in September 2018 requiring lenders to identify customers in persistent debt for 18 months. After the initial 18-month period comes to an end – which for many people will be next month – those who have not brought down their balances could be put on to a payment plan or face more severe options.
Akansha Nath, credit expert at Credit Karma, which commissioned the survey, said: “It’s daunting to think that we might be well into April before we’re consistently back in the black, but rather than using ‘quick fixes’ to free up some extra cash, there are lots of simple ways to get back in control of our finances, from creating a new budget to reviewing all outgoings or transferring debts to a 0 per cent balance transfer card.”
Borrowers seeking a zero per cent credit card now have less choice available to them as banks have withdrawn some cards from the market and reduced the interest-free periods.
This month, Bank of England research showed that the length of balance transfer deals reduced markedly and the availability of unsecured debt decreased towards the end of 2019 as lenders became more nervous about the UK economy.
Financial website Moneyfacts says the number of cards that allow balance transfers has dropped by more than a third in the past three years to reach a record low.