The Chief Secretary to the Treasury in Westminster told MPs that plans by the Scottish Government to "renege" on Scotland's share of the debt would have a "catastrophic effect", which would lead to an increase in mortgage rates and bills for Scots.
The Scottish Government has dismissed Westminster's pledge to veto a currency union as a campaign tactic but warned that, in the event of independence, it will withhold Scotland's share of the UK national debt if Westminster refuses to share the assets of the Bank of England.
First Minister Alex Salmond has also insisted Scotland cannot default on a debt it is not legally liable for and would have no moral obligation to pay without a share of Bank of England assets.
Speaking in the Commons, Mr Alexander told MPs during Treasury question time today: "The Scottish Government's plan to renege on Scotland's share of the debt in the event of independence is simply not credible because of the catastrophic effect it would have on the people of Scotland.
"Mortgage rates would go up, credit cards and bills would go up and the Scottish Government would have to resort to the bond markets equivalent of Wonga to raise money to pay for public services in Scotland.
"To default on the debt would be to punish every Scot for Alex Salmond's failure to think through his currency plan B properly."
Conservative Iain Stewart (Milton Keynes South) had asked Mr Alexander: "Will you comment on the astonishing claim from the Scottish Government that it would default on its share of the UK's debt if it did not achieve a currency union with the rest of the United Kingdom if, heaven forbid, independence were to happen?"