Payday lenders could overtake credit cards and become a mainstream method of borrowing, a report by one of the UK’s leading accountancy firms has warned.

PricewaterhouseCoopers (PwC) said that consumers unable to borrow from traditional lenders, including credit card companies, were seeking alternatives such as so-called payday loans.

But while these short-term, high-cost loans have previously been associated with higher risk borrowers on low incomes, the convenience and innovation offered by payday lenders are attracting a broader and more prosperous selection of consumers, at the expense of traditional bank loans.

In its report, Precious Plastic 2012, Simon Westcott, director at PwC, said: “Mainstream lenders need to be aware that what may have begun as a last resort could be an enduring relationship, as consumers are pleasantly surprised at the convenient and innovative service they receive from these smaller, more agile providers.

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