Latest figures reveal a steady decline in payday loan problems reported to Citizens Advice.
The charity’s new figures show a 53% fall in the number of payday loan problems it helped with in April to June 2015 compared to the same time last year.
Previous analysis from Citizens Advice also finds one in four people with a payday loan could have borrowed from a bank instead.
The figures come as the Consumer Finance Association releases a report into the short-term credit market.
Gillian Guy, chief executive of Citizens Advice, said: “High-cost credit is not the answer to financial difficulties.
“All too often payday lenders were lending to people to who couldn’t afford to repay. The 53% decrease in payday loan issues reported to Citizens Advice shows the new regulations are having a positive effect for consumers. The FCA needs to keep an eye on newer forms of risky credit like guarantor and logbook loans, as well as payday lenders.
“We are seeing a shift away from consumer credit debt towards problems with council tax, rent and utilities, as people struggle to cover day to day costs.
“There is a need for more responsive short-term credit options from high street banks. But it is also crucial that banks and creditors direct people towards free debt and money advice, especially when borrowing is not a suitable option for them.”
Citizens Advice figures show the service helped with 4,315 payday loan issues in April to June 2015, a fall from 9,243 in April to June 2014.
The fall in payday loan problems began in April 2014, when the Financial Conduct Authority introduced new rules for payday lenders and took enforcement action.