Over 4.8million Brits are topping up their earnings with credit card spending each month.
Keeping up with the Jones took on a whole new meaning in 2007 when aspirations to experience a slice of the luxury lifestyle enjoyed by the rich and famous lead many of us to spend well beyond our means.
Last year over 4.8million of us topped up our earnings with credit cards, overdrafts and personal loans after emptying our bank account each month and only 9million of us managed to break even. However, rather surprisingly it's not the increasing cost of living that is driving us to debt, but instead our need to shop.
According to new research published by USwitch we're spending more than ever enjoying life. Over the last decade consumer spending on luxuries such as holidays, clothing and meals out has risen over 65%, far outpacing our rise in net income (48%) and even the cost of living essentials such as housing and bills (43%) over the same period.
Unsurprisingly, personal debt has also soared to foot the bill for our 'extravagant' lifestyles with a 104% increase in the last ten years. In real terms this means that the average Brit is now paying out over £356 a month in an attempt to clear their credit cards and personal loans, a huge increase from the £174 we paid in 1997.
This obsession with buying now and paying later isn't confined to one particular age or social group with the young, old, haves and haves-nots all following the trend. A clear sign that overspending and paying on credit has become a way of life for many Brits.
However, we may have reached a turning point. Soaring mortgage rates and climbing energy prices coupled with disappointing high street sales over Christmas may be a sign that consumers are having to tighten their belts and cut back, especially as access to new credit is becoming increasingly difficult.
Only time will tell whether we learn our lesson and return to a more moderate level of spending but with insolvencies and property repossessions predicted to rise in 2008, lets hope we learn it fast.
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