The Dow industrial average hit 22,000 in August, ushering in yet another noteworthy high. But Americans also reached the big time with a different financial milestone this year – and not in a good way.

Outstanding consumer revolving debt – mostly credit card debt – hit an all-time peak of $1.021 trillion in June, according to the Federal Reserve. This should be a scary statistic. The last time the debt level was nearly this high was in 2008, when the U.S. economy was mired in a recession.

“We simply can’t keep taking on credit card debt forever without it causing major problems,” said Matt Schulz, senior industry analyst for CreditCards.com. “This record probably won’t be a major tipping point, but it likely isn’t too far off.”

Schulz says this milestone should be a wake-up call about the level of credit card debt Americans are accumulating. It’s a reminder to remember the past.

Here’s what we learned during the Great Recession: People had what they thought was a reasonable amount of obligations. They were making their auto and mortgage payments. They used credit to buy stuff to fill up those homes, eat out more or take vacations.

It all seemed manageable – until life happened: The housing market imploded and unemployment spiked. The illusion that people could get whatever they wanted – on credit – was shattered.

The truth was that the debt wasn’t as manageable as people thought, because they didn’t have an adequate cash cushion to help them through a disruption in their income.

As the amount of revolving credit is now soaring to new heights, it takes me back in time. (By the way, defaults are rising, too.) I fear that as the economy has improved, our memory of bad times has faded.

“America’s credit card balances have never been higher, but there’s no reason to think they won’t just keep climbing,” Schulz said. “Combine that with steadily rising interest rates and you have a potentially volatile mix.”

There’s so much we can glean from our failures.

“One fact we observe is that both the Great Recession and Great Depression were preceded by a large run-up in household debt,” wrote economists Atif Mian and Amir Sufi in “House of Debt: How They (and You) Caused the Great Recession, and How We Can Prevent It from Happening Again.”

The researchers argued that consumer spending dropped because people were so heavily burdened by housing debt. “As it turns out, we think debt is dangerous. If this is correct, and large increases in household debt really do generate severe recessions, we must fundamentally rethink the financial system.”

People are going to borrow. Despite my hatred of debt, I understand the role it plays in our economy. It drives auto sales, and so many people rely on their vehicles to get to work. Without mortgages, most Americans, including myself, would not be able to purchase a home. Debt also allows people to get a college degree.

But an excessive reliance on debt is bad for both the economy and households.

So how do you know if you’re taking on too much credit card debt? Follow this rule and you’ll stay within a reasonable amount: Don’t charge anything you can’t pay off by the next due date. If you can’t pay off the balance, you can’t afford whatever product or service you’re paying for with that card.

Michelle Singletary can be contacted at:

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