Meet the Petersons. Matt is a software engineer and Suzie works mostly at home raising their three daughters: Julianne, 12, Rachel, 11, and Caroline, 9.
They live in an upscale California neighborhood in a 4,000-square-foot home with a pool, a huge walk-in wine cellar and even its own movie theater. They drive nice cars and own a second home and two vacation time shares.
How do they do it? They're in debt up to their eyeballs.
"I know that we don't make ends meet each month, and to make ends meet, we use credit cards, and then the credit card payments start increasing, and you just can't make ends meet even doing that," Suzie said.
Their monthly household income of $8,750 isn't enough to cover all of their expenses, which total $15,000 a month. For over a year, the Petersons have relied on credit cards to keep afloat financially.
Using one card to pay off the other, their credit card balances eventually ballooned to $60,000. Their Bank of America Visa alone has a balance of $19,000, at an interest rate of nearly 33 percent.
The burden of their debt is something that keeps Suzie up at night. "I woke up at 2:30 a.m. this morning because yesterday we went to the diner and tried to use the debit card and it didn't work."
The Peterson's financial situation may sound shocking, but they are not alone. Nationally, credit card debt is growing -- almost tripling since 1989. Today, American consumer debt is over a trillion dollars. More than half of all cardholders don't pay their cards off each month and carry an average balance of around $2,000.
Ironically, families like the Petersons -- who struggle to make the minimum monthly payments -- are more valuable to credit card companies than customers who pay in full every month. According to the Government Accounting Office, credit card issuers make 70 percent of their profit from the interest payments made by cardholders who carry a balance every month.
Still, credit card companies insist they are not banking on customers' inability to pay.
"Credit card issuers are concerned about people who are only able to make the minimum payment because those people are at significant risk of not repaying the loan in the short term and that means the bank loses the money," said Nessa Feddis, a lawyer with the American Bankers Association, an industry trade group.
For that reason, Feddis says, credit card companies are constantly adjusting their policies to minimize the number of customers paying only the minimum amount.
Elizabeth Warren, who teaches bankruptcy and commercial law at Harvard University, disagrees. "Credit card companies have a special word for the customers who pay in full every month. They're called deadbeats."
Nothing helps the credit card companies' bottom line more than the fees and high interest rates they earn from consumers who are struggling with their payments. For example, one of the Petersons' credit cards charges a $39 fee for going over the spending limit or being late on a payment.
And even if the Petersons always pay their bill on time, the bank can still increase their interest rate to 32 percent if the Petersons are late with a car or mortgage payment, or any other payment to a creditor. That's because a "universal default" clause is buried in the fine print of the Peterson's credit card agreement, the terms of which can be changed by the credit card company "at any time for any reason."
"There's no contract like that anywhere else in America," said Warren, a contract law expert who admits that even she has trouble understanding some of the terms of credit card agreements. "They're deciding all the rules."
"We agree that the disclosures could be better," said Feddis. But she also argued that some responsibility has to fall on the consumer. "Pay off at the end of the month and pay no interest. Every cardholder has that opportunity. They make that choice."
In the Peterson case, a series of bad choices contributed to their massive debt. Six years ago, Matt lost his job and spent more than a year out of work. During that time, Suzie decided to open two scrapbooking stores. When her business folded last year, they ended up losing about $200,000 -- most of it borrowed money. There were also some bad real estate and stock investments.
Even as their financial situation worsened, however, the Petersons continued to spend. Last year alone, they took three vacations -- a cruise through the Carribean, a trip to Whistler, Canada and another to Hawaii.
The cruise was a contest prize, while other expenses were covered by their time shares. But all together, those vacations still cost the Petersons $4,000.
Matt concedes the vacations may have been unwise, given their dire finances. "OK, we need to be punished, I guess," he said.
Suzie, however, has no regrets. She saw the vacations as a way to bond with her daughters. "The cruise was my gift to my family."
To help them dig out from under all of their debts, "20/20" introduced the Petersons to financial planner Robert Pagliarini, author of "The Six-Day Financial Makeover," a step-by-step guide to transforming your financial life.
After reviewing the Petersons' financial records, Pagliarini calculated that they were about five months away from bankruptcy. All of their debts translated to a loss of $200 each day.
Pagliarini, the president of Pacifica Wealth Advisors in Los Angeles, likened the Peterson's situation to the Titanic.
"You've already hit the iceberg," he explained. "The ship is starting to go down. That's the bad news. The good news is you still have a small window of opportunity to make some changes."
Pagliarini devised a six-month action plan to rescue the Petersons from economic ruin. First, he advised them to dump their expensive time shares, even though this will mean the Petersons will lose $46,000 on their investment.
Pagliarini hopes they can recoup some of those losses by also selling their home and their second rental property. He believes those transactions will net the Petersons about $113,000.
Pagliarini then wants the Petersons to use that money to pay off their $60,000 credit card debts. If they take all of these steps, Pagliarini believes, the Petersons will actually have a few thousand dollars leftover to save and invest.
The catch? It's an all or nothing proposition. "Do all the big things or do none of them, because if you just do one, two or three, it's not going to work," said Pagliarini.
Matt Peterson is excited by Pagliarini's plan. "We can't wait. I mean we literally can't wait," he said.
Suzie was less enthused, saying, "We have no place to live and $3,000."
But by getting rid of all of their real estate, the Petersons will also unload expensive tax bills, mortgage payments and maintenance fees -- drastically cutting their monthly expenses.
When all the dust settles, Pagliarini believes the Petersons will be able to afford to rent a house in their neighborhood on Matt's current salary, and still have about $1,200 extra cash every month to save and invest. Compare that with the $6,250 the Petersons are now losing every month.
Pagliarini told them, "At the end of the day, after the cameras are off, it's you two. And you really have to decide, 'Are we willing to make these kinds of changes?'"
In the last week, the Petersons have begun contemplating some of those changes. They spoke to a real estate broker about listing their house and rental property. Pagliarini says he is always a phone call away to offer support, but whether this family can dig out from all that debt is now up to two people -- Matt and Suzie Peterson.