About 1.6m UK households are living in extreme debt, according to research from the Trades Union Congress.
The TUC figures are vastly different from official figures on the matter of debt but the union centre says the government is underestimating the burden of debt on many.
The Britain in the Red report said households are finding it harder than ever to cope with mounting debt as wages have failed to go up or in some cases fallen.
Total unsecured debt, including car loans and credit cards, excluding mortgages, for UK households increased £48bn between 2012 and 2015 to £353bn.
The TUC said 3.2m households are in problem debt, defined as spending more than 25% of total household income on unsecured debt repayments.
TUC general secretary Frances O’Grady, said: “Families can’t continue relying on credit cards and loans to get by. But with the average wage still worth £40 less than before the 2008 crash, lots of families have little choice.
“Higher wages must be at the heart of the government’s economic plan. We need a return to proper year-on-year pay rises and a higher national minimum wage.”