Debt problems are mounting in developed economies across the world. New levels of average credit card debt and revolving debt are routine occurrences on a monthly basis. Consumers are more and more relying on debt to cover near-term wants despite a lack of near-term funds. Consumers have been ingrained by aggressive marketers to believe that happiness comes from spending, even when you do not have the resources to do so.

Unfortunately for consumers, marketers and companies are not willing to back them when their spending and debt get out of control. Debt is not always bad. Some debt is very practical from a financial perspective. Careful review of financial choices often produces good reasons for use of debt. For instance, secured debt is routinely viewed as a viable means of debt consolidation, home renovations or repair, and business investments. Low cost or low interest debt is usually effective if the returns on investment (functional or otherwise) from the use of the funds outweigh the interest paid.

However, much of the debt that is piling up for borrowers is tied to revolving debt or credit cards, which are routinely being used for purchases that are non-essential and impractical. Simply put, consumers are borrowing money with high interest to avoid having to wait for income to be able to afford items purchased. Credit cards with high interest can take a reasonable purchase price and turn the real cost into a non-practical value over time when the balance isn't promptly repaid.

Although marketers and companies are happy to continue to encourage consumers to spend, and then spend some more, financial advisors are telling people to avoid the adverse credit that is affecting one in four of us. People are struggling to find good interest rates for necessary purchases, like homes and cars, because they have developed bad credit from too much discretionary spending. Bad credit has serious implications on people's lives because of its financial impact.

Debt consolidation, while often used to pay off high interest rate debt, is to be used with caution, according to many financial advisors. Despite the interest rate advantages offered by secured homeowner loans, analysts point to bad spending habits as the real evil in the debt scenario. Many consumers fall into a trap of taking on a large homeowner loan to pay off high interest debt, only to spend more and buy more with the freed up loan and credit card funds.