Consumer debt is debt that is accrued by purchasing consumer products as opposed to investment debt that is used to make investments. The vast majority of consumer debt in American is in the form of credit card debt. Consumer debt is fast approaching the one trillion dollar (1,000,000,000,000.00) mark. Credit card debt makes up about 880 billion dollars of this amount. As the rate of debt has increased the rate of individual savings has declined dramatically. A great many Americans have no retirement savings and are not investing in any retirement plan where they are employed.

Many people feel there is nothing wrong with high levels of consumer debt and some leading economists, business and political leaders actually have encouraged it. However the people that are encouraging excessive debt appear to profit the most from it. This conflict of interest means there is a genuine lack of credibility to these reports.

Even the FICO or credit score is designed to increase the amount of debt. The more debt you have and the longer you have been in debt all will raise your credit score. Something is wrong with this system. While many people are constantly trying to increase their credit score many very wealthy people have credit scores of 0, thats right zero. What wrong with this picture.

No matter what you have read or how much you have been brainwashed, debt is a bad thing. You will never become wealthy if you are carrying any form of consumer debt especially if it is credit card debt. If you want to be wealthy then you have to live debt free. It is a pure mathematical fact that cannot be denied even by the credit card companies and their slick marketing. Every dollar that you pay in credit card interest, late fees and penalties is wasted income that could be invested in the future of your family.

Recently the Federal Reserve has started to rein in the predatory lending practices that credit card companies have been using to entice and then trap people into a debt nightmare. Credit card companies have replaced the Mafia as the top loan sharks in America. In recent years credit card companies have charged their customers or victims more than 90 billion dollars in late fees and penalties. Most of these profits are taken through the use of predatory and immoral lending practices. That is more than they earned in interest payments.

If you really want to enjoy the American dream you have to live debt free. Stay away from all forms of consumer debt or credit. Live at or slightly below your means. This means you will be living on a cash basis which in turn means that you will be saving a lot of money that can be used to increase your net worth. Just saving and investing the money that you would be paying in credit card interest, late fees and penalties will make you wealthy in less time than you can believe. If you want to rich then do not use any form of consumer debt especially credit cards.