As the current financial climate seems unlikely to improve in any dramatic sense for at least another year it also seems likely that the number of people with poor credit ratings are also likely to increase.  While people are trying to decrease their personal debts, the UK still has the highest level of personal debt in Europe. It is true that the use of credit cards is far lower now than this time last year but it also must be accounted for that less people are eligible for credit cards in comparison to a few years ago. In fact, less people are eligible to borrow from credit card companies and banks that they were in 2006 for example.

The lack of lending from the banks and other mainstream sources has led to a rise in loans for people with bad credit which often comes in the form of a payday loan and bad credit loans. These are short term loans for people with high interest rates which can be obtained no matter what your credit rating. Their increasing popularity is a concern for many who believe that payday lenders charge extortionate amounts of interest to those who can least afford it.

However, it is also argued that if banks will not lend and payday loans are not an option then unregulated private loan sharks will become the next alternative. It is likely that over the next few years Payday loans as they become more regulated will also become more mainstream and this will lead to a safer, more transparent market place for the consumer. 3 month payday loans will become a lot more common place.