• More than 25% of households with income below $10,000 carry credit card debt
  • More than 40% of households with $10,000-$25,000 in income do
  • More than 50 million households carry credit card debt — average balance: $7,000
  • Credit card debt of the average person going bankrupt: $17,544
  • Americans going bankrupt last year: 1.4 million
  • Versus 20 years ago: 8 times as many


Ram Samudrala
Palo Alto, CA
Age: 26
Occupation: scientist

“In Buddhist philosophy, one of the four noble truths takes the form that desire is the cause of all suffering. I would modify it thus: desire for material goods beyond your means is a cause of suffering.” Ram racked up $18,000 in debt but is now methodically paying it off. He got his first cards in college, he says, “because they served as status symbols. I had a roommate who struggled to get a card, but on my 18th birthday, I applied for an Amex and AT&T Universal Card and got them both, much to the consternation of my roommate. In fact, AT&T Universal sent me five cards.” In other words: Be careful what you wish for.


David Manuel
New Orleans, LA
Age: 27
Occupation: Urban Planner
Credit Cards: 1

“I got my first credit card when I was 19; it was a Visa with a $500 limit. For the first year or so, I paid it off every month. Then I started paying most of it … half of it … I began getting offers for other cards with higher limits and lower rates, so I kept taking them. I also hit on the trick of accepting a card with a low introductory interest rate, say 5.9% for the first six months, and transferring all my balances to that one card. Then, before the intro rate ended, I got another intro rate from a different card and moved the balances again. The only problem was that my total debt was increasing. By the end of graduate school, I had twelve Visas and MasterCards, with a total credit line of well over $100,000. I owed $12,000 before I’d ever gotten a real job. We’re all too dependent on credit that’s just too easy to get. I’ve become terrified of incurring any debt at all. I pay for everything with cash or debit card, and have become obsessive about tracking every penny. I feel almost nauseated when I spend money on a large purchase and worry about it for weeks afterward. I feel like I’m going to end up one of those people with $2 million dollars in a savings account but who eats cat food and government cheese and won’t turn on any lights. I think I’ve developed an unhealthy attitude to finances in general.”

I think so, too. For many people, a debit card is actually a better solution. It looks just like a credit card, but it works only when there’s cash in your checking account to cover it.



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