Research from Mintel published today shows 10 per cent of credit card holders, or the equivalent of 2.3 million consumers, find it difficult to pay off the interest on their account each month and always have a balance outstanding.

The consumer market analyst warns that the increasing build up of consumer debt will leave these consumers vulnerable to wider economic conditions such as possible increases to interest rates or unemployment.

Paul Davies, senior finance consultant at Mintel commented, “Many people are still using credit cards despite not being able to pay off existing debt as they are often encouraged by rising credit limits offered by providers.”

The research highlighted that more than 3 million consumers, or one-in-seven adults, have credit card debts in excess of £1,500, two million consumers have debts of over £2,500. Mintel found that it was people aged between 25 and 44 were the most likely to owe more then £1,500.

Mr Davies stated, ‘People with credit cards are increasingly building up large balances, often taking advantage of interest-free periods on new cards available through switching provider. However, if interest rates rise consumers may find that they have trouble paying off existing debt and face higher monthly repayments to credit card companies.”

The increasing debt levels reflect official figures which show that there has been a 14 per cent increase in personal bankruptcies during the three months to June 2003.

Mintel warns that the problem is growing as the number of credit cards issued increases dramatically. Between 1995 and 2002 the number of cards issued more than doubled from 28 million to 58 million in 2002.

It also claimed that the number of credit cards issued would exceed the number of debit cards for the first time by the end of this year. At the end of this year over 64 million credit cards are expected to be in issue, compared to 62 million debit cards.