Consumer debt has grown rapidly since the year 2000, with the average Briton now owing £33,000, a new report has warned.
A study by accountancy firm PriceWaterhouseCoopers has claimed household finances are increasingly stretched.
It warned that many will soon come to the end of their two-year fixed-rate mortgages and face repayment increases of around £140 a month.
The company predicts a spike in insolvencies during 2008 as a result of consumer over-indebtedness.
Richard Thompson, a partner at the Big Four firm, said: "There are tough times ahead for both consumers and credit card companies".
He predicted consumers will find it hard to borrow in the run up to Christmas as lenders tighten their criteria.
Recent research by price comparison website moneysupermarket.com found more than five million Britons are resigned to a lifetime of debt and believe they will never manage to become entirely debt-free.
Tim Moss, spokesman for the website, said debt had become the "curse" of modern times.