A new study by the Center for American Progress, a liberal Washington research institution finds that as the credit squeeze has made it more difficult to obtain property-based lines of credit, American consumers are turning to their credit cards as an alternative. VOA's Barry Wood has more.

Credit card debt in the United States has risen to a record $790 billion. The Center for American Progress report finds that credit card debt is currently rising at a rate four times higher than earlier in the decade. The researchers blame the credit squeeze and tighter lending rules by banks that have cut back on the popular home equity loans that are linked to value of the home owned by the borrower.

Tamara Draut is the author of a book on credit card debt.

"One safety valve [for obtaining credit] has shut, the ability to tap equity in your home, because home values have generally fallen and many consumers are now tapped out [borrowed to the limit] anyway," said Tamara Draut.

There is disagreement over just how much money the average American household owes on credit card debt. Most data suggest that about half of credit card holders pay off their balances each month. The study finds that 35 percent of cardholders pay late, thus accumulating penalty fees.

Jonathan Orszag of the University of Southern California says American consumers are woefully uninformed about the high fees and interest rates associated with late payments.

"Financial literacy in America is horrible - that's a simple way to say it," said Jonathan Orszag. "And so we need to start young and get people to understand financial products."

The study says tighter regulation is needed so that consumers will be less confused by enticing offers they don't fully understand. Tamara Draut says current practices operate to the benefit of card issuers.

"There has to be a better balance between borrower education and lender responsibility," she said. "Lenders need to be held to some higher standards. Borrowers have become extremely unprotected while all the rules are tilted in favor of the lender."

Currently, credit card debt on average equals under 9.3 percent of cardholder's disposable income. That ratio has risen of late but is still slightly below the record level of nine point six percent recorded during the recession of 2001.