Too many Americans just don't have their debt under control, and things are likely to get worse. Are you in this group? If not, some of your loved ones might be. According to a recent report from the Federal Reserve, as of Nov. 2003 Americans owe a total of more than $2 trillion. That's more than the gross national products of India, Russia, Poland, Australia, and South Korea combined. This is a record high.

The $2 trillion includes most short- and intermediate-term loans to consumers, such as car loans and credit card debt, but excludes real estate-related loans such as mortgages. (Adding in mortgages would hike the amount to around $9 trillion, but that's less troublesome a figure since home ownership is generally a good thing and real estate generally appreciates, unlike items such as cars that lose value over time.)

It's estimated that about 60% of American families have credit card debt. According to the folks at, the average household with credit card debt owes more than $8,000.

Only a decade ago, our total consumer debt was just $1 trillion, so we've doubled in 10 years. Meanwhile, personal bankruptcies have also doubled over the past decade, with 1.6 million households filing in 2003. That's 1.3% of the roughly 122 million American households out there, which may not sound like much until you realize that this is just for one year. If these kinds of numbers persist over 10 years, we'll be looking at 16 million household bankruptcies, representing perhaps more than 10% of households.

All this debt is a big problem. A Washington Postarticle quoted Howard S. Dvorkin, president of Consolidated Credit Counseling Services Inc., as saying, "You cannot be the wealthiest country in the world and have all your countrymen be up to their neck in debt."

A contrary take
Though many experts agree that all this debt is very worrisome, there's one high-profile expert who disagrees: Federal Reserve Chairman Alan Greenspan. He recently expressed little concern about debt levels, as he addressed a credit union trade association, saying, "Overall, the household sector seems to be in good shape" and "bankruptcy rates are not a reliable measure of the overall health of the household sector, because they do not tend to forecast general economic conditions, and they can be significantly influenced over time by changes in laws and lender practices."

Hmm. OK. But they do still represent a heck of a lot of people whose financial situations careened out of control, no?

From bad to worse
So why is this problem likely to get worse? For starters, once you're mired in credit card debt, it's not easy to dig out. (But it can be done, and we're here to help. Drop by our Credit Center for many tips and support.) Making matters worse, though, is the fact that many Americans are up to their eyeballs in debt while interest rates are very low. It's inevitable that rates will climb higher in the years ahead, and when they do, credit card rates will likely rise, too, crushing overextended borrowers with greater force.

Another reason this overall problem of massive consumer debt isn't likely to disappear anytime soon is that there are just too many folks making good money off of it. Robert Manning, author of Credit Card Nation: The Consequences of America's Addiction to Credit, is quoted in The Washington Post saying, "In the old days, the best customer was someone who could pay off their loan. Today the best client of the banking industry is someone who will never pay off their loan," since such a client will generate a lot of fee revenues. The average household consumer debt in 2002 produced some $1,700 per year in finance charges and fees, according to Manning.

Debt reverberates
There are a lot of other problems associated with our spiraling debt loads. For one thing, when you're struggling to get out of debt, you're not socking away money for your future, such as your retirement. Thus, many Americans are way behind schedule in saving for tomorrow. The upshot of this is that many people simply won't be able to retire, and will have to try to keep on working as long as they can.

[Note: If any of this is freaking you, consider consulting a financial advisor. Learn how to pick one effectively in our Advisor Center, and consider checking out TMF Money Advisor. It features independent, professional, one-on-one advice.]

Another downside to debt is divorce. You're probably aware that roughly half of all marriages today end in divorce, but did you know that the top reason that people end up divorcing is financial? Do you think that debt might be part of the problem here? Me, too.

Solutions abound
If you or someone you know is dealing with unmanageable debt, take heart. All is not lost. Here are some tips to help you keep your financial house in order.

To prevent getting trapped in bad debt, aim to always pay off your credit card bills in full. Don't buy anything you don't have the money for -- except perhaps for something like a car, if you get a good, low interest rate. (Manageable mortgages are also fine.)

If you're in debt, dig out. Try our free Get Out of Debt online seminar in our Credit Center. You have nothing to lose but your high blood pressure.

Finally, talk with others. You might feel like you're the only one you know with pressing financial troubles, but you surely are not. Some friends or loved ones might have good advice for you, drawing on their personal experience. Consider spending some time on our vast discussion board community, too, where folks are encouraging one another as they dig out from debt.

Selena Maranjian pays her credit card bills off as soon as they arrive . For more about Selena, view her bio and her profile . You might also be interested in these books she has written or co-written: The Motley Fool Money Guide and The Motley Fool Investment Guide for Teens . The Motley Fool is Fools writing for Fools .