Former South Dakota governor Bill Janklow, who helped lift the interest rate caps in his state in the 1980s and made South Dakota the first credit card capital of America, acknowledges that he inadvertently helped foster the current rising consumer credit card debt. He is incredulous about the perplexing way that some consumers are using their cards today.

"Millions, if not tens of millions of people over the last couple years have refinanced their homes, picking up anywhere from half a percentage point to one and a half percentage points, for long term financing," he explains. "Yet most of those same people will run around with one or more credit cards that are charging anywhere from 18 to 20-some percent per annum, and not even be thinking about [it]. It's unbelievable, the lack of sophistication that we have as a society to deal with what I'll call consumer credit."

According to some, consumers' failure to review their statements for any contractual changes, coupled with a general sense of not fully acknowledging their own credit card spending habits, helps explain why the U.S. has record levels of revolving credit card debt.

"There's a certain disconnect in the U.S. between people and their finances," says Jim Tehan, the spokesman for Myvesta, the nonprofit consumer education organization. "We've done phone surveys in the last few years that showed almost 50 percent of people didn't know what their APR was, and 25 percent who didn't even review their statements each month."

Kim Hodges, the graphic artist from North Carolina, who at one point was more than $30,000 in credit card debt, admits she, too, suffered from this disconnect. Unlike many in her situation, Hodges says it wasn't a catastrophic medical event or a job loss that got her into trouble. Instead, it was her sense that a financial windfall was right around the corner. As she puts it, she "was living in the future."

"I always thought 'I'm going to be able to pay this back tomorrow' - that I would get royalties to take care of it all in one fell swoop," she says. "Psychologically I put it on the back burner."

Hodges admits to associating "credit" with "free" for years. In hindsight, she acknowledges there was a degree of irrational spending at play. "I was struggling and working hard. I thought I deserved to treat myself or my friends," she says. It wasn't until the interest rate on one card shot to 35 percent because of late payments that she got what she says was a huge "reality check."

That apparent disconnect also relates to the way consumers describe their own spending habits. An April 2004 financial literacy study for Bankrate.com by RoperASW, a global market research firm, found that 75 percent of credit card users report that they do not make any major purchases on credit when they know they won't be able to pay it off immediately.

That study -- clearly contradicted by industry statistics and other polls -- underscores a level of "debt denial" in this country, says Greg McBride, senior financial analyst at Bankrate.com. "We see a big gap between attitudes and action," McBride says, as well as a reluctancy to admit to having debt and how much. "People were more apt to disclose their age, weight and yearly income than disclose the amount of credit card debt they had," he says.