Holiday bills are beginning to pour in, forcing a large number of Americans to soberly assess the state of their personal finances.

For many, the verdict is grim.

Consumer debt, which includes auto loans and credit cards but excludes mortgages, rose to a record $1.99 trillion in November, the Federal Reserve reported recently. That's about $18,249 per U.S. household. Holiday spending certainly raised that number still higher.

"We've never had so many who owed so much," said David Wyss, chief economist with Standard & Poor's.

And there's mounting evidence that the burden is becoming dangerously heavy.

The percentage of conventional mortgages in foreclosure in the third quarter nearly touched the record set early in 2003. Credit card delinquencies, or missed payments, hit a milestone of 4.09 percent in November, the American Bankers Association reported recently.

Beyond the mounting number of family financial crises, the rising debt burden could slow the economy, some economists say. Consumer spending largely powers economic growth, and if enough consumers are forced to limit spending to dig out of debt, the pace of growth could lag.

The fastest growing class of indebted consumers are those 65 and older, experts say.

Seventy-year-old David Karper, for example, didn't have a problem shouldering his credit card debt until he retired in 1999 as a driver for a medical lab. With Social Security as his only retirement income, and the benefits much smaller than he anticipated, the Baltimore retiree realized that it would be difficult to maintain his card payments and gradually fell behind.

By May 2000, Karper's card debt had grown to $12,000, and he entered a debt-management

program offered by a local nonprofit credit counselor. A year later, he went back to work as a laundromat attendant four days a week earning $7.50 an hour.

"I had so many things I wanted to do after I retired. I don't want to go to work at all," said Karper, who had postponed his dream of building a model railroad. Recently, he made his final debt payment.

Of course, some economists point out, many Americans are not overwhelmed by debt, and a substantial minority of consumers pay off their credit cards monthly with no problem.

"We're in a situation where debt burdens are very high on a segment of the population, but I don't believe that's true of consumers in general," said Richard DeKaser, chief economist for National City Corp. in Cleveland.

Still, credit experts say they see a growing number of people from all income levels struggling to keep up. Many are living on the edge, just a divorce, illness or job loss away from toppling into serious financial straits, experts said.

"They are like two Americas. They are the indebted and the debt-free," said Jordan Goodman, author of "Everyone's Money Book on Credit."

"The debt-free are about 40 percent of the population, and they are doing great. Their stocks are up, and their real estate values are up. And their 401(k)s are up, and they are having a great time," he said.

The remaining 60 percent aren't doing well, Goodman said.

"These are not only low-income. More and more middle-income and former higher income - busted dot-comers, airplane pilots, programmers whose jobs have gone to India - have a lifestyle they can't maintain any more," Goodman said.

Consumer advocates blame today's debt problems on easy credit.

Decades ago, banks relied on strict credit criteria, which often meant that the access to credit was blocked for those without the best of finances. Now, with more sophisticated lending tools, credit is being extended to a broader group of people through a wider variety of products and interest rates, experts said.

Some economists argue that's a good thing. But credit experts say many people, including college students without a job, haven't been able to manage the easy money. "It's like giving unlimited sugar to kids and seeing how they handle it. You get predictable results," said Goodman.

At the same time, there's been a cultural shift, said Robert Manning, a professor at Rochester Institute of Technology and author of "Credit Card Nation."

"It used to be that most Americans would save 10 percent (of income) for a rainy day," Manning said. But that Depression-era generation has been followed by baby-boomers who rely on credit to bail themselves out in emergencies, he said.

That will be OK, Manning said, until the banks say, "No."

And experts say that's already happening, with banks taking a tougher stance with consumers falling behind.

"That's what's causing the crisis of the indebted," Goodman said. For example, banks that once charge a $10 late fee, now slap consumers with a $35 penalty, he said.

And credit card interest rates jump if payments are tardy.

How long can this upward spiral of consumer debt go on?

Economist point out that in the short term, consumers' willingness to loosen their purse strings while businesses were tightening their belts helped sustain economic growth and lessened the effect of the recent recession. Consumer spending accounts for two-thirds of all economic activity.

But there's concern for those living on the edge and about the long-term economic consequences of consumer debt.

If interest rates begin going up this year, as expected, that could be enough to put those with variable rate loans and credit cards into a financial tailspin, experts said.

It also could hurt homeowners, who in recent years extracted billions of dollars worth of equity out of their homes through cash-out refinancings and home equity loans, said Mark Zandi, chief economist with Economy.com in West Chester, Pa.

Eileen Ambrose writes for The Baltimore Sun, a Tribune Publishing newspaper.

This story ran on Baltimore Sun on January 17 2004.