The report highlighted where credit can be “damaging” when borrowers overstretch themselves and are left unable to repay the amount that they have borrowed.

It found 52 per cent are dependent on door step lending – which tends to focus on short-term, high cost loans. The interest rates found on these types of loan is typically higher than 50 per cent, but can extend to beyond 500 per cent.

And a quarter of these borrowers use the loans on a continuous basis to cope with their financial difficulties amid the recession.

Door step lending sees lenders offer unsecured loans– typically in the region of £300, which is repaid in installments to an agent who calls at the borrower’s home on a weekly basis.

As many as 26 per cent depend on credit cards while a further 19 per cent rely on store cards, according to the OFT’s report into high cost credit.

It suggested the total amount of credit was £228 billion in August 2008, reaching £230 billion in June 2009, before falling slightly in July and August to £229.5 billion.

The report suggested: “Consumers have reduced their expenditure and worked to rein in borrowing to protect themselves against the effects of the recession. It is clear however, that there is still a reasonable appetite for credit.”