John and thousands like him meet across America -- in church basements and high school auditoriums -- every week. They talk about blowing the mortgage payment on gourmet restaurant meals, then scrounging to find enough coins for the tollbooth. They know that sick dread while opening the mailbox, wondering which bill is now due. They've seen how debt can destroy marriages and even lead to suicide.

They're members of Debtors Anonymous, a 12-step program modeled on Alcoholics Anonymous. They are clerks and executives, artists and electricians. Some have trust funds, others make minimum wage. Some overcharged on credit cards, others bought "fully-loaded" cars with seven-year loans, still others moved into lavish homes with interest-only mortgages. What they have in common is an overwhelming temptation to spend more than they earn. If you think that makes them different from the rest of us, consider this:

• Americans bought over $2 trillion worth of stuff on credit last year.
• Current outstanding debt on credit cards -- that's the "revolving" part that we don't pay off every month -- totals nearly $700 billion, up from just $50 billion in 1980.
• Three of five American families can't pay off their credit cards each month. Their running balance averages about $12,000, which is one-fourth of the median household income.
• By the mid-1990s, credit card debt held by Americans living below the poverty level more than doubled.
• Senior citizens, once noted for their frugality, are sinking deeper into debt: Their average credit card balance increased by 89 percent between 1992 and 2001.
• Total consumer debt in the United States comes to over $7,100 per person -- and that doesn't include mortgages.

Grim as that sounds, there's help to be had. With the right attitude and a little credit know-how, anyone can climb out of the hole and stay debt-free for life.

Just ask Wayne and Rebecca Denton of Clayton, North Carolina. In the 1990s, while Rebecca was in nursing school, Wayne, a lawn-care technician, began putting all their purchases on eight credit cards. By 1998 they were $88,000 in debt -- more than their combined annual income of $61,000.

At first Wayne tried to hide the debt from Rebecca. But it got so bad that he couldn't even make the late-payment penalties, much less pay the bills. Eventually the phone was shut off, and Wayne had to borrow money from relatives just to buy food. The couple hit bottom when Rebecca considered filing separation papers. "But the lawyer told me that we'd be fighting over assumption of debt," she recalls. "I was shocked. In most divorces, people fight over assets. We had no assets."

Rebecca says she "cried to God to save my marriage." The turning point came when she bought a $12.95 workbook by radio host and debt-reduction guru Dave Ramsey. The couple cut up their credit cards, and started working overtime to pay the bills. "Instead of getting mad at each other, we got mad at the debt," says Rebecca.

Seven years later, with one son and another on the way, the Dentons are debt-free, living in a larger house and building up their savings. "It's been a radical change in our thought process," says Rebecca, "but I wouldn't trade it for anything." They keep one credit card for buying gas, which they pay off every month. And they read the fine print. "The credit card companies are really trying to put one past you," says Rebecca.

It wasn't always that way. Back in the 1950s, banks introduced credit cards to promote customer loyalty, especially the kind of customer who would pay the bill in full each month. The business grew steadily but remained fairly genteel until the 1980s, when a series of state and federal deregulations made it possible for banks to charge more interest and operate nationally. Nationwide marketing opened the floodgates. In 2003, banks mailed out 5.2 billion offers for credit cards.

Today more than 75 percent of American families have at least one credit card, which makes it possible to rent cars, shop on the Internet, and buy plane tickets. "You need a credit card," says Terry Savage, the syndicated Chicago Sun-Times financial columnist.

What you don't need, she adds, is the long-term debt. Banks make more interest when people pay over time; that's why minimum payments on credit cards have shrunk to as low as one percent of the total balance. With payments that small, it sounds so easy.

But wait: The average college student owes almost $2,800 on plastic, and that doesn't include student loans. If she pays $50 a month, assuming an 18 percent interest rate, it will take her more than ten years to pay off the credit card -- at a total cost of $6,154.

Financial experts agree that personal responsibility could prevent most debt problems; don't spend it, and you won't have to pay it back. But they still put some of the blame on banks, which lure new customers with low rates, then jack up the interest if they're late on just one payment. Many consumers are unaware that banks can raise your rate if you're late paying a completely unrelated bill, such as your mortgage. (It's in the fine print.)

Banks argue that late payments indicate credit risk, justifying higher rates. But in recent years banks have redefined what's risky -- often raising rates and charging penalties if a payment is late by even a few minutes. According to Robert Manning, a noted industry expert, late fees rose from $1.7 billion in 1996 to $7.7 billion in 2003.

Officials at the American Bankers Association, the trade group representing the credit card industry, say this: "Lenders use penalty fees as a risk-management tool against customers who mishandle their finances."

Dave Ramsey has seen it all: "When you hear about a 78-year-old widow living on $800 a month in Social Security, and the credit card company lets her rack up $70,000 in debt, there's a lot of corporate immorality there."

How much debt is okay? Savage recommends that your mortgage payment plus property tax and home insurance total no more than 40 percent of your take-home pay; Ramsey says no more than 25 percent. If you haven't already consolidated your student loans, do so before June 30: "Consolidation rates are the lowest ever," she says, "and if you agree to have the payment automatically withdrawn from your checking account, they'll usually knock another quarter point off the rate." Car loans -- up to four or five years at a low interest rate -- are also acceptable. "If you need a seven-year car loan, you're buying too much car," says Savage.

Total debt, though, should never be more than half your take-home pay -- and that's assuming you're putting the maximum into a 401(k) before taxes.

As for credit card debt, most experts agree that any is too much. "If you can only make the minimum payment on your credit cards," says Savage, "that's when you know that debt has become your lifestyle."

Struggling to keep up with those payments, nearly 9 million Americans seek debt counseling every year. Sadly, many will wind up deeper in debt -- victims of overpriced schemes that promise to "Pay Down Your Debt!"

According to a 2003 study by the National Consumer Law Center and the Consumer Federation of America, many debt counselors are little more than telephone solicitors, raking in high-pressure "donations" from debtors -- as much as $50 a month plus a sign-up fee that can total a month's worth of debt -- in return for making payments and negotiating lower late fees and interest rates with banks.

But consumers can often get just as good a deal by calling creditors themselves. Furthermore, the plans almost never address secured debt like mortgages and car payments. That means a serious debtor could still lose his home or car, even if the credit card bills are paid -- not much of a deal.

Five years ago, Dolores and Aldo Porziella of Hyde Park, Massachusetts, were in debt "up to our eyeballs" -- owing $10,000 on credit cards while getting by on Aldo's modest income as a hairdresser. The Porziellas signed on for a debt-management plan with Florida-based Consolidated Credit Counseling Services.

For a fee of about $30 a month, Consolidated offered to negotiate lower interest rates on three Porziella credit accounts. But Dolores was looking for even lower rates, and after just one payment, decided to take her business elsewhere. "They may say they're nonprofit," says Dolores, "but I don't think they're in business to help you out."

Technically speaking, Consolidated is not "in business" at all; it's a tax-exempt charity. In 2003 the organization reported revenues of nearly $23 million. Some of that revenue was paid to for-profit companies with ties to officers of Consolidated, for bill processing and other operations. Consolidated spokeswoman April Lewis-Parks notes that the company pays under fair-market value for such work. Lewis-Parks also says that the Porziellas dropped out of the program too soon to see results, and withheld information about some of their creditors. "We have over 50,000 clients, and we strive to provide each person with exemplary service."

For just $9 a month, the Porziellas switched to Consumer Credit Counseling Service of Southern New England, part of a counseling network endorsed by Terry Savage and other experts. CCCS got the couple's Visa card rate lowered from 20 percent to 6 percent. In December the couple made their last payment on that card.

Living debt-free is about more than getting creditors off your back. Knowing you have the financial leeway to weather hardships brings priceless peace of mind to Gary and Sue Cowan. When Tropical Storm Allison hit Houston in June 2001, the Cowans' home was flooded. "We had to leave our house by boat," recalls Sue, who was five months pregnant with her third child. But with their credit cards maxed out at $50,000 and no savings, they couldn't afford the repairs that insurance didn't cover. Six months later, Gary was laid off from his $60,000 technology job. "We were devastated," says Sue. The couple declared bankruptcy.

Soon, though, fresh credit card offers began arriving in the mail. "Bankruptcy doesn't mean anything to them," says Sue. "They just jack up the interest rates." With Gary scraping by on a series of short-term jobs and Sue working at a grocery store, the Cowans quickly rang up $30,000 in new debt.

Sue admits she was a shopaholic: "I wouldn't buy my kids' clothes at Target," she recalls. "I shopped at Dillard's" -- an upscale department store. The Cowans finally changed their habits, selling off the house to pay debts and committing to living within their means. "There's a mentality in this country that if you can afford the payment, you can afford the thing," says Sue. "Now our attitude is if we don't have the cash, we don't buy it." It's a way of life they're trying to pass on to their kids. "Our 11-year-old has $1,000 in savings, and she even made a donation to an orphanage," says Sue with pride.

Leading by example could be the best hope for a debt-free future. "Right now we're teaching our kids how to be great consumers," says Dallas Salisbury, chairman of the American Savings Education Council. "Spending is like binge drinking, and the comedown can be very harsh. Moving away from the consumption message will take a personality transplant for the nation."