That is more than two-anda-half times the European average and the debt burden is set to grow faster in Ireland than in any of our neighbours for the rest of the decade.

The extent of Ireland's buynow pay-later culture was revealed in new research published last week by market research firm Datamonitor, which examined consumer debt in 16 European countries.

It found Irish people owe an average of 5,750 each in nonmortgage debt compared to 4,642 for the British and 2,278 for Europeans as a whole. Only oil-rich Norwegians owe more than the Irish, according to the report.

It also reveals that, because the market is less competitive, Irish borrowers are likely to pay more for credit than their UK counterparts.

Paul Marsh, financial services analyst at Datamonitor and author of the report, said:

"Like the UK, Irish people are heavily indebted. Only Norway owes more per head of population. The economy has been performing exceptionally well and that has translated into a great demand for credit products.

Disposable income is high in Ireland and that gives people the confidence to take things out on credit."

Consumer debt in Ireland soared by an average of 18.5% each year between 2001 and 2005, according to Datamonitor's figures, a rate of growth beaten only by Turkey and Greece. The debt now stands at 14.4% of national wealth, measured by gross domestic product, and is second only to the UK, where consumer credit stands at 16.2% of GDP.

The credit boom is set to continue, with Datamonitor forecasting 7.2% annual lending growth until 2010, by which time we will be borrowing 13.3bn a year for purposes other than mortgages.

These predictions are backed by new figures published by the Central Bank on Friday. It reported that, while the rate of growth in consumer credit slipped slightly in August, it is still outstripping growth in the mortgage market.

Separate research by IIB Bank and the Economic and Social Research Institute earlier this year found that 80,000 people would be financially stretched by rising interest rates. Since then the cost of borrowing increased in August and is expected to rise again this week when the European Central Bank meets in Paris to review interest rates.

Datamonitor's growth predictions for Irish consumer credit are based in part on expectations of a price war as more foreign lenders enter the market. "There's not so much competition between lenders in Ireland as you find in larger markets such as the UK, " said Marsh. "Lenders can operate off higher margins than in the UK and make more money."

He predicted this would change with the arrival of new entrants such as Halifax Bank of Scotland (HBoS), which is building a branch network around the country to sell personal loans, credit cards and other financial products.

"There's potential for other foreign lenders to enter the market, " Marsh said. "I expect that some are holding off to see how HBoS is doing before they make their move."