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It's a well-known fact that the U.S. government could not operate without a generous helping of credit. The national debt keeps rising each year.

It turns out a lot of consumers are living that way as well. When the National Foundation for Credit Counseling (NFCC) conducted an online poll, 1 in 5 respondents said they would not be able to make ends meet each month without the help of a credit card.

“Credit should be used as a convenience, not to supplement income,” said Gail Cunningham, spokesperson for the NFCC. “It is a warning sign if a person is not able to manage his or her daily lifestyle without the use of credit cards, as this is a dangerous habit that could lead to serious financial distress.”

NFCC decided to dig more deeply into the living-on-credit issue when it pulled together records from last year's credit counseling activity. In 2013 the average consumer who turned to an NFCC member agency for guidance had between 5 and 6 credit cards with a total unsecured debt equal to half of their annual household income.

Danger signs

Cunningham says there are clear signs that appear when you are over-using your credit cards. One is when you find you are only paying the minimum payment on credit card bills each month. That means you are mostly paying interest, with very little going to principal.

Another is when your credit card balances keep growing. That means you aren't using your card as a convenience, but rather you are spending money you don't have.

When you find you are skipping payments, are late each month, or that your account has gone to collection your problem is getting deeper.

From bad to worse

You've moved from bad to worse when you find you are using balance transfers to keep moving debt around, but aren't paying it down. If you even think about taking out cash advances, payday loans, title loans or other non-traditional credit, warning klaxons should be sounding.

If you find yourself arguing with your significant other over money issues, it means it is long past time to get your finances in order.

Since the financial crisis of 2008 and the structural changes it brought to the economy, it's very easy to find yourself in a situation where you are unable to make ends meet. You might lose your job or have taken a job that pays less than in the past. The temptation is to use credit cards to get by.

Wealthy hand-to-mouth

A Brookings Institute study identified a group of consumers it calls the “wealthy hand-to-mouth.” They may have assets, like a house or a car, but not enough income to sustain them.

Both these groups no doubt make up the group of consumers who turn to credit cards out of desperation. While these groups may think they have no other option, Cunningham insists they do, though it may require some sacrifices and tough choices.

“People may feel as though they have no alternative to using credit to supplement their income, but that is a dangerous habit that can lead to financial ruin,” said Cunningham.

Cunningham's message is this: regardless of how you got in a deep financial hole, breaking one of the basic rules of personal finance – spending more than you make – is not likely to have a positive outcome.

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