Back when I worked at a bank, around 2007 so right at the height of the mis-selling stuff, overdrafts and credit cards were known as gateway products. Worked like this:
Person A finds themselves short at the end of the month by £50-100 so pops in branch to see what help can be done. Gets offered an overdraft of £100. After awhile they get used to having this extra spending power so they start to live their lives using it every month. Bank then offers an overdraft limit increase to £250, next time it’s £500 etc. When it hits £1k person A is called in for an Account Review and their continuous time in their overdraft is flagged up. Reviewer offers a small loan or 0% credit card transfer for 3 months to pay it off. All good,except they don’t cancel the overdraft so person A dips into it again. Repeat the Account Review etc. Easy to go from £100 for a few days to £1-2k in loans easily for a lot of the general public.
One of the reasons I left the job was constantly seeing people sucked into the life of everything ‘on tick’, it’s a major problem and if it takes big charges for people to get the message early on that spending more than you earn is a bad thing I’m all for it. I know the banking regs are different now so anyone relying on an overdraft for day-to-day spending should flag up and appropriate help offered. Debt can be used for good but it is so often sold as ‘credit’ and people use it to the max and never think things through. Think of sofas sold as £10 a month not the actual price etc.