ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Tuesday, August 27, 1996 TAG: 9608270113
SECTION: WELCOME STUDENTS PAGE: 53 EDITION: NEW RIVER VALLEY
DATELINE: RADFORD
SOURCE: MAUREEN HEALY SPECIAL TO THE ROANOKE TIMES
My Radford University roommates and I arrived at the beachfront Cancun hotel early on a Saturday morning in March. Before we'd even settled into our room, we melted into the sun-drenched sand, lathered ourselves with coconut oil and ordered Coronas by the bucketful.
Relaxing peacefully on the beaches of Mexico was exactly what we needed to cure the Radford winter blues. After months of ice storms, blizzards and below-freezing temperatures, this vacation seemed too good to be true.
And, in a way, it was.
After we had soaked up two straight days of golden Mexican rays, we took a hotel-sponsored tour to a nearby island.. Flavio, our tour guide, said that we had to pay the day before the trip.
No problem. I slapped down my Visa card and waited for him to hand me my ticket. I started to worry as a frown wrinkled his usually happy face.
"What's wrong?" I demanded. "Isn't it going through?"
"No. You didn't pay your bill, senorita?"
"Yes, I did!" I protested.
Without going into the details of international credit-card transactions, suffice it to say that I was stranded on the Gulf of Mexico with no plastic. My roommate had to charge everything for both of us the rest of the week.
After racking up five days worth of charges on her card, I panicked.
For the first time, I realized that I had maxed a credit card with a $1,600 limit and I couldn't remember what I had bought. Not only that, I had four more cards at home with pretty high balances.
I was just a lowly college student making barely above minimum wage in a part-time job.
What had I spent all that nonexistent money on?
According to Charlotte Shrewsbury, vice president and branch manager of First Virginia Bank in Radford, I wasn't alone.
"Students do have a tendency to use credit cards a little more than they should. The sad thing is it's so tempting to use them for everything," Shrewsbury said. Her advice: Pay your credit card bill in full every month to avoid interest and out-of-hand balances.
"A lot of times students don't realize that they are on a national line that checks credit," she said. And the consequences can last long after the spring-break tan fades away.
"If payments are not maintained, it does show up on your credit report for five to seven years, even if the account is closed with a zero balance for any amounts past due," said a spokeswoman for the Virginia Tech Credit Union.
Once I returned to the Arctic Circle (aka Radford), I mustered up the courage to add up all of my bills.
It was not good.
The calculator seemed to grin as it displayed the grand total: $2,704.82. How could I have done this to myself?
Here's how:
With my easily acquired credit cards (free squeegie bottles to all college students who sign up), I realized I could have anything my heart or wardrobe desired.
I became a Victoria's Secret catalog junkie. Instead of picking one or two favorite items to buy, I just ordered it all. My rationale? If I waited until I actually had the money, my dream clothes might be out of stock or discontinued. Besides, I could always return those slacks that didn't fit.
Shopping sprees became a habit rather than a treat. Forget layaway! Whole outfits were mine with one swipe of the plastic. I was having the time of my life.
But, after the Cancun trip, reality finally hit. I knew I had to take control immediately or my future would be over before it began. After all, my spoon-fed college days wouldn't last forever.
What to do?
If I continued to pay only the monthly minimum, interest would just build. Skipping a month of payments to save up to make one big payment wasn't an option.
So, to get myself out of the deep hole of debt, I followed a system I had read about in an old issue of Cosmopolitan magazine.
I figured out how much of my monthly income I could devote to credit-card bills and still survive. I came up with $150. Then, I divided that by six, the total number of credit card bills I owed.
Minimum monthly payments for each card were $20 or less. I could afford to pay $25 each. It was barely above the minimum payment, but at least would keep my credit record clean.
Then I made a chart of how long it would take to pay off the card with the least amount on it: eight months. Once I had that paid off, I doubled the amount and paid $50 to the next-lowest balance while still paying $25 to the rest of the cards.
I estimate I'll pay everything off in January 1998. It's a long, slow road to recovery, but it works.
LENGTH: Medium: 91 lines ILLUSTRATION: GRAPHIC: color.by CNB