“I am very uncomfortable about my credit card debt,” said Haas, 31. He and his wife, Natasha, make nearly $6,000 a month. “We aren’t bad managers of our money. We realize what’s coming in and roughly what’s going out. But we just couldn’t get ahead of the curve.”

Haas has entered a debt management program with the Consumer Credit Counseling Service of Greater Dallas. The interest rates on his six credit cards are frozen. With his monthly regular payments, he hopes to be out of debt in two years.

But that’s because the interest rates he pays are low. Haas says he couldn’t dream of escaping the debt cycle if he had to deal with spiking interest rates.

He’s not alone. Many consumers weighed down by debt loads don’t have the flexibility in their budgets to face increased payments.

Interest rates are at four-decade lows, thanks to the Federal Reserve’s policy to stimulate the economy. But with the economy surging in most areas, the Fed may feel pressure to start raising rates this year, experts say, to keep the economy from growing too fast and sparking inflation.

Such an increase would only push up credit card rates, making it more difficult for Americans to pay off their nearly $745 billion in credit card debt. Middle-income people would feel even more pinched and many low-income consumers would be forced into bankruptcy.

Some economists are worried about a combination of factors today: Household debt is at an all-time high at $9.4 trillion, personal savings is at an all-time low of about 2 percent of after-tax personal income and foreclosures and delinquencies are up. Throwing a rate increase into that mix will cause more damage, they say.

“Rising interest rates won’t short-circuit the economic expansion,” said Mark Zandi, chief economist at Economy.com, which provides economic and financial research. “But there are significant parts of our economy which will be hurt very badly. It’ll be particularly hard on lower-income households.”

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An increase in rates would affect different types of debt differently.

First off, a change in the Fed’s short-term interest rates would affect adjustable-rate mortgages, credit cards and home equity lines of credit. Economy.com estimates that the interest rates on about 20 percent of all household debt adjust with the Fed’s rates. But rates may not rise dramatically, and an increase of, say, a quarter-point wouldn’t be all that significant.

Consumers with fixed-rate mortgages that are locked in for 20 or 30 years won’t feel much of a change. Nor will those with fixed-rate auto loans.

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But many other stress factors are at play. Overall household debt hit a peak of $9.4 trillion in the fourth quarter of 2003. The worrisome portion is credit card debt, which is at a high of $745 billion. Credit card delinquency rates are also high, at 2.68 percent of cardholders nationwide in 2003, according to Equifax and Economy.com.

The catch with credit cards is that if consumers stumble on even a single payment, the rates can go to punitive levels – 18 percent or more – making the payoffs a nightmare. Also, many credit cards are tied to short-term interest rates, and if the prime rate changes, the interest rate could go up in three to six months.

That wouldn’t be good news for the millions of consumers struggling with debt. Some are already going under.

Experts say that when interest rates tick up, more distressed consumers will surface.

Bankruptcies nationwide have reached historic highs. Nationwide, the total number of personal bankruptcies filed in 2003 added up to 1.6 million – a record high in any calendar year, according to the Administrative Office of the U.S. Courts. Meanwhile, credit counseling agencies say the number of clients they see on a regular basis has leaped.

But Fed Chairman Alan Greenspan has maintained that consumer debt is manageable.

“The household sector seems to be in good shape,” he told the Credit Union National Association recently. “During the past two years, debt service ratios have been stable.”

But a local consumer credit counseling agency begs to differ.

“When I look at the number of debt management companies and the rapid increase, it tells me that Mr. Greenspan is not living in the same world that I am in,” said Bettye Banks, senior vice president for education at Consumer Credit Counseling Service of Greater Dallas. “If most people are managing their debt well, why have we seen such an increase in debt management services?”