While the economic recession continues to threaten the financial security of low- and middle-income households, its effects have been heightened by the reality that, even before the downturn, millions of households were experiencing difficulties meeting the most basic expenses. Now, as families experience declining home values and tightened credit markets, many are falling behind on their mortgage and credit card payments.

The following report shows how skyrocketing costs, dwindling savings, stagnant wages and medical debt have forced low and middle-income families to turn to plastic as the de-facto safety net.

The report is based on a survey conducted between April and August 2008-consisted of 1,205 phone interviews with low- and middle-income households whose incomes fell between 50 percent and 120 percent of local median income; such households comprise roughly half of all households in the country.