Consumers owed £178.2 billion on credit cars and loans in the run-up to Christmas, according to the Bank of England.
It was £1.5bn more than at the same time a year earlier, the biggest annual increase in eight years.
The rise in borrowing follows the increases in retail sales, which rose 5% in November according to the Office for National Statistics (ONS).
It also comes at a time when consumers are saving less, with the ONS reporting that households are saving 4.4% of their income - the lowest less for 50 years.
Howard Archer, the chief UK economist at IHS Global Insight, said: "This will fuel concern that consumers are borrowing more and saving less to finance their spending, which is likely a consequence of relatively high consumer confidence and extended low interest rates."