Curiosity contributor Diana Bocco investigated the impact of credit card debt on family and personal finances, and this is what she discovered.

According to Foreign Policy Magazine, 40 percent of the world's credit card spending is done in the U.S. That sounds like a pretty high figure -- perhaps too high to believe. But when you factor in the fact that the average American has 3.5 credit cards and a credit card debt of almost $16,000, that figure doesn't seem unbelievable at all [source: CreditCards.com].

At first view, all this spending might seem to indicate a rich, financially stable country. However, the truth is that the United States has more bankruptcies per million people than any other country in the world. In fact, more than 4,000 Americans per million people have declared bankruptcy. For comparison, in Great Britain, the number is less than 1,000 per million [source: Mann].

While it's true that credit can help people acquire goods and services they need, often times it means they end up spending more than they can afford. When two scientists from the MIT Department of Economics looked into the psychology of buying and spending, they discovered that people who pay with a credit card are less likely to experience the "pain of paying" (an uncomfortable feeling that takes away from the pleasure of buying), which could help deter cash users from overspending [source: Prelec and Loewenstein]. However, this doesn't mean that all credit-card-using consumers are making carefree purchases or recklessly buying high-priced items.

Sometimes, it's a matter of someone using credit as a holdover to cover costs for necessary goods and services -- like new tires or a trip to the doctor -- until the next paycheck hits the bank. But, no matter what precipitated the credit card purchase, the problem is that many credit cards are set up to levy a high percentage rate (up to 30 percent) on balances that are carried over from one billing cycle to the next.

Researchers from Monmouth University in New Jersey estimate that more than 4 million Americans have been pushed below the poverty line because of high annual interest payments [source: Abate]. Before they had credit cards and large amounts of debt, these people were actually in slightly better shape and hanging above the poverty line. Once in debt, however, getting out of debt is nearly impossible, because even if you stop spending on the account, the interest continues to be charged, leaving the credit card holder in a loop of payments. This is the cause of financial ruin for many low-income families and individuals.