Feeling besieged by all those post-holiday credit card bills? Struggling to dig out from an avalanche of debt?

You are not alone.

According to the latest figures from the Federal Reserve, America's consumer debt has topped $2 trillion for the first time, continuing what debt experts view as an alarming surge in recent years.

To some, the nation's consumer debt, which dwarfs that of any other country, represents the kind of "bubble" that the stock market grew into during the 1990s.

"It's a huge problem," warns Howard S. Dvorkin, president and founder of Consolidated Credit Counseling Services Inc., a nonprofit debt-management organization. "You cannot be the wealthiest country in the world and have all your countrymen be up to their neck in debt."

Robert D. Manning, a leading expert on the credit card industry, sees families as likely to come under even greater stress as interest rates -- currently near historic lows -- inevitably rise.

"That's one of the trends that's really going to kill the American consumer in the next downturn," he says. "It's just impossible to keep these interest rates this low for much longer."

Tied to the record consumer debt levels has been a surge in personal bankruptcies, which reached an all-time high of 1.6 million households in 2003.

In its latest statistical release on consumer credit, the Federal Reserve reported Thursday that consumer debt reached $2.004 trillion on a non-seasonally adjusted basis in November, the latest reporting period.

The figure covers most short- and intermediate-term credit extended to individuals, including car loans. It excludes loans secured by real estate, such as home mortgages. When mortgages are taken into account, the nation's households owe close to $9 trillion, Manning says.

The $2 trillion figure represents a doubling of America's consumer debt in less than 10 years. According to the Federal Reserve, the debt topped the $1 trillion mark for the first time in December 1994.

Of the total, commercial banks are owed the largest share, nearly $624 billion. More than $740 billion of the total is revolving credit, while $1.264 trillion is nonrevolving.

On a seasonally adjusted basis, the consumer debt reached nearly $1.995 trillion in November, also a record. The only good news in the Federal Reserve figures, debt experts said, was that the seasonally adjusted debt grew at an annual rate of 2.4 percent for the month, down from 5 percent in October and 6.9 percent in September.

But the overall problem may be worse than the latest record debt level indicates, said Manning, author of the book, "Credit Card Nation: The Consequences of America's Addiction to Credit." He traces the problem to a credit economy in which credit cards have become "yuppie food stamps," akin to a "social-class entitlement" rather than an earned privilege. Now, government figures show that three out of five U.S. families have credit card debt.

"What's alarming is that [the consumer debt figure] doesn't accurately reflect the true distress on various segments of the American population," he said. Not included in the Federal Reserve figures are "new kinds of hybrid financial institutions and new loan products," such as those offered at rent-to-own stores. There, interest rates typically work out to more than 200 percent a year, and sometimes more, Manning said. In one such store catering to middle-class African Americans, he said, the annual interest rate came to 800 percent.

And the other shoe drops

NEW YORK, Jan 12 (Reuters) - Worries that consumers will run out of spending power after the mortgage refinancing boom fades are misplaced, according to a research paper released by the New York Federal Reserve on Monday.
The surge in refinancing in the past three years as interest rates tumbled helped shore up household spending, even as the economy eked its way out of recession and new jobs remained scarce.

But the eventual end of the refinancing boom does not necessarily spell a significant slowdown in spending, the study said.

"Concerns are rising that the recent surge in home equity withdrawal has left consumers in a weakened financial position that will, over time, prompt a retrenchment in spending," the study by New York Fed economists said.

"However, a look at household assets and liabilities suggests that consumers have used the withdrawn funds to restructure their balance sheets and reduce their debt service burden.

"As a result, households may be in a better position to spend in the years ahead," said economists Margaret McConnell, Richard Peach and Alex Al-Haschimi.

The study was posted on the New York Fed's Web site on Monday at(http://www.newyorkfed.org/research/current_issues/ci9-12.pdf)

More than one out of every four home mortgages in the country were refinanced in 2003, making it the largest wave of refinancings by volume in history, the Fed study said.

The second one would have sounded better if it weren't for the first.