Glasgow council is to open a credit union account for every teenager in the city after discovering that about 100,000 Glaswegians use high-interest payday lenders, fuelling a spiral of debt.

An investigation by councillors has estimated that poorer residents borrowed £57m last year using payday loan companies and other high-interest, short-term lenders such as Wonga to finance day-to-day living costs and pay off other debts.

The council says it will now give every child £10, deposited in a personal credit union account when they start secondary school, to help reduce debt problems by educating teenagers about managing money. Credit unions are alternative lending schemes where members pool their savings and borrow from one another.

The scheme was announced as charities said statistics from the Scottish government showed child poverty levels were "stagnating". The official figures found the number of children in relative poverty had fallen slightly from 2010 to 2011 in Scotland, from 170,000 to 150,000.

The first phase of the savings scheme will start with 6,000 first-year pupils next year, to be repeated for each new intake.

The council has also said it will ban "unconventional lenders" from renting council properties and will press the UK and Scottish governments for tougher action on payday loan companies, such as allowing councils to use planning laws to stop them swamping high streets and shopping arcades.

The council's research found the case of one woman who borrowed £1,500 from seven different lenders in just a few days, with only one trying to verify her income and employment status. One loans shop gave three loans in a day to one gambler. Another woman was "stuck in a cycle of borrowing and paying off new debt equal to her total income every two weeks".

Councillor Paul Rooney, the city treasurer leading the cross-party group investigating the industry, said: "I think we all suspected that the use of these loans would be relatively high in Glasgow, but the figures are startling.

"Glaswegians borrowed more than £57m this way in the last year – and around 100,000 adults are using some sort of non-standard credit. To put that in context, it is enough people to fill Celtic Park and Ibrox [football stadiums] at the same time. If you do not have a payday loan, someone you know does."

The measure was applauded by Citizens Advice Scotland (CAS), the umbrella organisation for the citizens' advice bureaux (CAB) network, which has its own national campaign on payday loans, as well as the Church of Scotland.

Chris Wigglesworth, vice-convener of the Kirk's church and society council, said it was a brilliant way of promoting financial education in schools, and urged other councils to take up Glasgow's policy.

Keith Dryburgh, policy manager with CAS, said its 250 advice bureaux around Scotland had 50 new cases a day last year where people had taken out payday loans they could not afford to repay. In other cases, payday loan companies emptied their customers' accounts to pay off loans, harassing customers by phone and hiring debt collection agencies.

"In many cases this has destroyed their lives," Dryburgh said. "CAB evidence is very clear that the growth of payday loans in the last few years has seen a lot of irresponsible lending, which has led many families into the misery of unmanageable debt.

"For people who are struggling to make ends meet, payday loans can seem very attractive. But they have interest rates as high as 4,000%, and these have a huge impact on people who are on low incomes."

Council officials said the details of the credit union scheme were still being developed, but the cost – about £60,000 a year in deposits – would be met by the council's existing financial inclusion projects. There would be strict rules to protect each £10 deposit for a year or more.

Rooney acknowledged that tough credit union rules on lending were often a barrier for people struggling to find money, pushing them to use payday loan shops. But the object of the new children's scheme was to promote a culture of saving, and in adulthood give them access to safer, cheaper and longer-term lending if they needed it.