ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Wednesday, December 11, 1996 TAG: 9612110024
SECTION: NATIONAL/INTERNATIONAL PAGE: A-1 EDITION: METRO
DATELINE: BALTIMORE
SOURCE: Associated Press
The shock came that summer, when they added up the balances on their credit cards: $35,000. Two years later, with the help of a credit counselor, they are still paying down the debt at $800 a month.
``We like to give generously. And I guess we gave too generously too many years. If somebody wanted something, we just charged it,'' Hamby said. She added: ``I learned my lesson young. I'll never do that again.''
Credit counselors - professionals who help people like Hamby, 32, dig themselves out of debt when they overdo it - are bracing for a post-holiday onslaught this year.
``During the holiday season a lot of people are putting aside their worries about their financial problems and trying to gain some happiness,'' said Bernie Dancel, chief executive of National Credit Counseling Services, a nonprofit group in Columbia, Md. ``It's almost addictive. It's like a drug.''
This year's crisis may be worse than ever, with bankruptcy filings reaching a record 1.1 million over the past 12 months, and with people expected to increase their credit card spending by 13 percent over the $116 billion they charged last holiday season.
Dancel said his organization got 5,600 calls during the first week of December alone, double the number from the same period a year ago.
In recent years, credit card companies have been making it easy for people to get in over their heads - letting them skip a monthly payment, raising their credit limit and practically throwing plastic at them through the mail.
As of June, there were 376 million Visas and MasterCards in circulation, up 80 percent from 1991. The average household has four credit cards with balances totaling more than $4,800, more than twice the 1991 average, according to the counseling service.
Credit counselors help people work out a repayment plan with the credit-card companies, often negotiating down the interest rate and principal. Many of these counseling services are funded by the credit card industry itself.
Brenda Halstead said this year she won't be among those needing credit counseling, as she was last year.
``I lost my mind temporarily,'' said Halstead, a 43-year-old nurse. ``I plead temporary insanity.''
Halstead and her husband moved from New York state to rural Missouri to care for her father 1 1/2 years ago. The move cost her $6 an hour and her husband, a Sears appliance repairman, $3 an hour. But they didn't let that stop them come Christmas.
They kept up a three-year pattern of high spending, plunking down as much as $2,500 for jewelry and video games for their two sons and other relatives. When they finally called a credit-counseling service for help, the balances on their cards totaled about $30,000.
Halstead blamed simple overspending, as did more than half of the cardholders surveyed by telephone by Bankcard Holders of America, a consumer group based in Salem, Va. Another 11 percent blamed medical bills, 11 percent cited college costs and 9 percent pointed to layoffs.
Bringing the balance to zero may be tougher than many people think. It takes 23 years to pay off a $1,900 balance by making only the minimum monthly payment, according to Bankcard Holders of America.
Credit counselors urge holiday shoppers to pay for presents out of this year's budget, decide in advance how much to spend, avoid impulse-buying by sticking to a shopping list, use one card for all charges for easier tallying and pay it off when the bill comes.
For those who shun this advice and get in trouble, counselors recommend putting more money toward higher-interest cards, paying more than the minimum and sending in the payment as soon as the bill comes.
Once she's done paying off her debt, Halstead says she will have one simple policy: ``I'm not going to charge anything for the rest of my life.''
LENGTH: Medium: 74 linesby CNB