A fifth of poor households who borrow money end up spending 30 per cent of their weekly income on repaying debt, according to a report by Barnardo's.
The charity also warns that families on low incomes are being exploited by lenders, pointing out that some credit providers charge people significantly more to acquire basic household appliances through rent-to-own schemes than it would cost them to buy the same appliances outright in high-street shops.
"The most vulnerable families in society are being lured into an unaffordable debt trap by a morally bankrupt lending industry," said Barnardo's chief executive, Anne Marie Carrie.
The report calls on the Office of Fair Trading to enforce stricter rules on rent-to-own lenders, compelling them to display high street equivalent prices of the products they sell.
Barnardo's also says the Government should do more to ensure the poorest families have access to mainstream financial services so they do not need to rely on rent-to-own schemes, loan sharks or payday loan companies. They should be encouraged to save for essentials, rather than borrowing, it argues.
The report found that families who bought a Beko fridge-freezer from the rent-to-own company BrightHouse, backed by private equity-owned Caversham Finance, would end up paying £1,074 over three years, while the same product is on sale in Comet for £430.
The charity also pointed to figures from the Business Department that show two in five households with an income of less than £13,000 per year who take on debts end up owing 60 per cent of their income.
A survey this month revealed that 3.5 million are likely to take out a high-interest payday loan over the next six months.