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As times get better can you keep a leash on your credit card?

Published: Tuesday, June 18 2013 2:22 p.m. MDT

Greg Vandagriff poses outside his apartment Saturday, June 15, 2013. Greg is trying to save and earn money by selling items on eBay from a small extra room in his apartment at the Village in Provo.

Scott G Winterton, Deseret News

SALT LAKE CITY — One man saved his life by losing his wallet.

In February, Greg Vandagriff, 28, sat at home all day, unsure of how to entertain himself while he waited to receive new credit cards.

"It shut me down. Took me out of commission. I realized I had no way of amusing myself that didn't involve spending a lot of money," Vandagriff said.

In 2012 he spent about $55,000. This in spite of taking in only $29,000 that year, overspending by about $2,000 per month. By March, he was more than $80,000 in combined credit card, car and student loan debt.

It took losing his wallet to get a painful wake-up call.

Consumers in the United States are on track to add almost $47 billion in new credit card debt in 2013, according to projections released last week in Card Hub's report on first quarter credit card debt.

Card Hub is an online resource that provides credit card comparisons and reviews so consumers can make educated decisions on getting credit cards to match their needs. The site also provides tips for managing credit cards and finances successfully.

Card Hub generated the numbers by combining the amount of new debt incurred in the first quarter — more than $34 million — with the amount of debt paid down, nearly $32.5 billion. This amount is 7 percent less than the same period last year, indicating that as the economy recovers, so does the appetite to use those credit cards.

The data show people spending more than they can afford, he said. A typical pattern is when people use credit cards for their daily expenses and delay paying off the full balance. The debt can quickly balloon to unmanageable levels.

It is important to take a look at risk factors for "personal recessions," according to Will Vandertoolen, director of counseling services at AAA Fair Credit Foundation. First quarter spending patterns indicate a "tolerance toward debt," he said.

Debt management solutions are simple, said John Kiernan, senior analyst at CardHub. CardHub offers five solutions for effectively navigating this path

1. Stick to a budget

The first step to managing debt is to prioritize expenses — including debt and emergency fund payments — and cut out excesses. "People have gotten to the point where many things that are truly luxuries they consider necessities," Kiernan said.

Thirty-two percent of Americans prepare a detailed budget each month, that tracks income and expenditures, according to a Gallup Poll released in early June.

The Malloy family of South Jordan is among those who do. In February, Emily Malloy decided she was done with living paycheck to paycheck. They went from two cars to one, dropped their cable package and switched homeowners and car insurance policies.

She listed all the family's debts in a notebook and created a plan that would make them a debt-free family. Each time she pays a bill, she lists the new balance in her notebook so she can see the progress they are making; it's old-school balancing a checking account.

The Malloys eliminated their credit card debt — nearly $5,000 — in just more than two months and paid down more than $6,300 in total debt. Tax refund and work bonus money that they would have normally used for extra expenses were applied to reducing their debt instead.

“I would love to keep up with the Joneses, but I don’t want to pay their bills. I’m OK making my life as beautiful as I can on a budget,” Malloy said.

In March, Vandagriff made lifestyle adjustments to stop living above his means.

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