Users with growing balances

Many people have become dependent on credit cards to get by. Thirty percent of our survey respondents who carried a balance said they owed more than $10,000. The median debt level in this group was $17,366, and 25 percent of people falling in this group said they had no idea when they might pay off the debt. Interestingly, this group had a median income greater than $75,000, and almost half were college graduates. Those folks didn't all rack up debt by living large; among the major causes for steep balances were car and home repairs, medical and veterinary bills, and basic necessities such as groceries, utilities, and gas.

Demos, a public policy research group in New York, found in a 2008 survey of low- and middle-income households that credit-card debt was rising fastest for senior citizens, with the average senior carrying $3,988 in medical debt. Balances are also building from a young age. According to Sallie Mae, one-third of undergraduate students put some of their tuition payments on their credit cards last year.

Valerie Constantine of Tucson, Ariz., owes $21,000, largely from charging income- and property-tax payments (as well as some vacation expenses). Her manageable rates of 11 percent to 13 percent were hiked to 27 percent and 29 percent in July. She is self-employed as a consultant, makes good money, and has a 786 credit score. She says she can pay her debt off eventually but adds, "I might as well have borrowed from the Sopranos."

What to do

• Negotiate with your card issuer. Thirteen percent of our survey respondents said their issuer initiated offers of payment plans, reduced interest rates, or debt-settlement programs to get the balance paid off. But entering into such an agreement might hurt your credit score, depending on how the settlement is reported to the credit bureaus. If you pay off the entire amount through a debt-management program, your score will not be affected. If you and the creditor agree to settle for less than the full balance, there could be a negative effect on your score, but it will be worse if you default.
• Roll over balances to small bank or credit-union cards. Even if you can't roll over all of a balance, just moving a portion could yield some breathing room. But make sure there's a cap on the transfer fee—5 percent on a $10,000 balance is a painful $500.
• Look out for debt-settlement scams. Instead, negotiate directly with your credit-card issuer. If you feel overwhelmed, contact a nonprofit credit counselor through the National Foundation for Credit Counseling (www.nfcc.org).
• Consider other options. You could borrow against life insurance or your 401(k) balance (but if you lose your job, you might need to repay the loan all at once), borrow money from family members, or take out a private loan. Again, credit unions might offer the best loan rates.
• Leave your card at home. A University of Maryland and New York University study found that people who used cash instead of plastic generally spent less.