NEARLY 90,000 people in Wales have household debts in excess of £10,000, and more than 100,000 see more than half of their monthly income eaten up by credit re-payments.

Ten per cent of consumers in Wales feel that they have borrowed more than they can afford to repay, and nearly one in five have fallen into arrears with credit re-payments or household bills during the last year.

These are among the staggering, and worrying, findings of a survey of extreme debt in Wales.

The survey, which shows that eight in ten Welsh consumers are credit-users, with one in seven borrowing from at least five different sources, was commissioned by the Department of Trade and Industry, with analysis of Welsh data carried out by the Welsh Consumer Council. The UK-wide survey was supplemented by a booster sample in Wales, to ensure reliable results.

The survey showed that in Wales credit available through mail order catalogues is the most popular source of credit currently used by 25 per cent of consumers. This was followed by personal loans (21 per cent); credit cards (20 per cent) and hire purchase agreements (14 per cent). Overdrafts and store cards are less popular, with fewer than one in ten people currently using these types of credit.

Claire Whyley, head of research at the Welsh Consumer Council, said: "It is clear people are starting to pay the price of their heavy reliance on credit. Although the number of people in arrears has dropped slightly in the last 12 months, one in eight consumers are still behind with credit commitments, household bills or both.

"Currently, one in ten people are in arrears with household bills and one in 16 cannot keep up with credit repayments. More worryingly, over 100,000 consumers in Wales have fallen behind with three or more difference commitments."

Preliminary analysis of the data shows that one in six people face a constant struggle to make ends meet and a staggering one in three run short of money before their salary or benefit is due.

"It is a cause of real concern that many people do not expect their situation to improve," she said. "One in ten say their financial circumstances are worse now than they were 12 months ago, and one in seven expect the situation to deteriorate further in the coming year.

"With the festive season fast approaching the pressure to 'buy now and pay later' will be stronger than ever. Too many consumers in Wales face a Christmas that will be far from joyous and, potentially, an even unhappier new year. It is very important that we understand the nature, extent and causes of over-indebtedness in Wales, so that every possible step can be taken to reduce its occurrence and alleviate the effects."