Debt woes could hit home on 24 January as hard-up people, counting the cost of Christmas, turn in desperation to expensive payday loans.
The warning has come from Coast & Country, a regeneration and housing company based in the North-east. It has dubbed 24 January Payday Loan Danger Day, after research showed it's the date thousands of people struggling to make ends meet are tempted to take such a loan.
With many people being paid early before Christmas, the wait until the next payday on 31 January may be more than six weeks.
"People need to make their money last longer due to getting paid earlier than usual because of the festive break," warned Iain Sim, Coast & Country chief. "But there is even more temptation at the moment as payday lenders are taking out high-profile adverts to encourage people to borrow short-term money."
He pointed out that there are much more affordable alternatives such as community banks, also known as credit unions, where people can access money at reasonable rates.
Compared to a payday loan, £250 borrowed from a typical community bank could be paid back during a year at a cost of £5.30 a week. That's an APR of 19.6 per cent, far lower than that quoted by payday lenders, with Wonga – Britain's most profitable payday lender – quoting an APR of 5,853 per cent.
Workers from Coast & Country are hitting the streets in the North-east to warn people against being tempted to take out a payday loan to cover the long gap between December and January paydays. They also plan to highlight other forms of affordable alternatives, including credit unions.