Datamonitor did a recent study and found that more than a third of all new non-mortage borrowing is due to unsecured credit. These debts include credit cards and unsecured loans and consist of more than £216bn in 2005. For every European borrowing, there are two British residents borrowing. The business research firm found that the average British resident owes £3 175, more than double that of the average Western European’s £1558 in unsecured debt. personal debt has risen to about £1.2 trillion.

This study compared borrowing behaviour in 16 European countries and looked finance products such as personal loans, hire purchases, credit cards and overdrafts. it found that the average UK resident has an “insatiable appetite for credit”.

The UK has seen an explosion in borrowing over the last decade, which is revealed by the figures in the study. The Consumer Credit Counselling Service (CCCS) blames the misuse of credit cards for the many problems their customers encounter. Frances Walker, a spokesperson for CCCS, said British residents use more credit cards than Western Europeans and that outstanding balances on credit cards have risen by 383% in the last 14 years.

Those who have a big amount of debt may find it difficult to repay everything. Though this is a small portion of the UK population, it is becoming a problem. Customers of the CCCS owe on average £33 000, which is 20% up from the 2003 average of £27 566.

The study found the French were the second most likely group to apply for new credit. Only the Germans could rival the amount of unsecured debt of the UK. The economies of Turkey and Greece have had rising non-mortgage borrowing. The years 2002-5 saw a 52% increase in new lending in Turkey and Greece had a 29% increase in unsecured borrowing in the same period. Both these countries have consumers applying for credit, and growing their outstanding balances at a dizzying pace.

A financial analyst at Datamonitor says the UK market is saturated and it is a difficult place to do business in because of the amount of debt everyone has.

While the mortgage market of the UK is reaching saturation point, the mortgage market of Turkey is still undeveloped. This means that credit cards, as an unsecured borrowing option, is the most popular borrowing method.

In more mature mortgage markets such as Holland, the reverse is true: unsecured credit accounts for only 5% of all lending and people expand their mortgages to afford certain things.