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I've wanted to ask this question for a long time. How do people run up such massive credit card debt? Don't alarm bells go off at a certain point?? Granted, the CC issuers are ever ready to give one the capacity to spend far beyond one's means (and we won't mention the touters of home equity lines of credit here), but just how does one spend oneself into a corner?

Case in point: Elizanne's friend. Gross income of $65K, CC debt of $50k, and a car loan with an outstanding balance of around $10K. At least the car loan is secured.

At 18%, the interest payments alone come to $750/month. My wife and I own a house in Maine to which we hope to semi-retire in a couple of years. The mortgage payment, taxes, insurance, and PMI (private mortgage insurance) come to about $795/month. The PMI will be removed (about $45/month) this summer as we made some improvements to the house that have upped our equity to over 20% of the selling price of the house. Elizanne's friend is paying in interest alone an amount equal to our house payment, and we get an APPRECIABLE asset as well as a place to relax and enjoy ourselves as long as we own the place. Oh, by the way, the improvements also gave the place bed and breakfast income generating capability.

My wife and I are not Prodigious Accumulators of Wealth as defined in "The Millionaire Next Door", a book I highly recommend to everybody. We just have never spent more than we made, so it's very difficult for me to fathom how one could run up massive debts without there being an external cause (i.e. some kind of financially traumatic experience).

Please don't get me wrong, I'm not trying to trash people, I just am curious as to how it happens. I have a great deal of admiration for people who have managed to pay off their debts and stay out of debt, or who are taking the responsible road and are well on their way to being debt free.
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