DATE: Friday, October 31, 1997              TAG: 9710290140

SECTION: PORTSMOUTH CURRENTS     PAGE: 06   EDITION: FINAL 

TYPE: COVER STORY 

SOURCE: BY F.G. EDWARDS, CORRESPONDENT 

                                            LENGTH:  130 lines

CREDIT WHERE CREDIT IS DUE

It's tempting. It's easy. It takes only a few minutes to fill out an application. Mail it off and receive a key to the good life, a plastic credit card with your name on it.

It can also take years of headaches, hard work, tears and trouble to climb out of the hole of consumer debt.

David Bell knows. He's worked both sides of the easy-credit/hard-payment business.

A 1988 graduate of Elizabeth City State University with a degree in general business administration, Bell worked for companies who lend money (``the easiest commodity in the world to sell,'' he quotes a former boss in the lending industry).

``I spent about five years working for ITT Financial Services,'' said Bell. ``It's funny. I've seen some of the same people I saw at ITT. Now, I'm trying to help them get out of debt, rather than into debt.''

Bell now works for a non-profit company that tries to solve the financial problems of those who misused the ``easy'' commodity.

Bell manages the Portsmouth Boulevard office of the Consumer Credit Counseling Service of Virginia Inc. He has worked for the company since 1990.

The company opened its first office in Richmond in 1980. During that 17-year span, it has counseled 170,000 families, and returned in excess of $200 million dollars to creditors. CCCS now has seven offices in Southside Hampton Roads. Founded by Richard Bryan, CCCS sets up client budgets through its debt management program, contacts creditors and works to get beleaguered clients back on their feet.

Creditors, not clients, pay CCCS.

Bell said that 80 to 90 percent of the clientele are word-of-mouth referrals, who have heard about the service from those who have used CCCS to get back on their feet financially.

The counseling service has set up a program that works - not painlessly however.

``They sign an agreement,'' said Bell. ``First of all, they agree not to get anymore credit. They surrender their credit cards. We cut them up. We set up a budget. We call the creditors and try to set up payments, using our Debt Reduction Program.''

Wait a minute. Did Bell say, cut up credit cards?

Yes, he responded, without a moment's hesitation.

``One of the stipulations is to cut up the plastic,'' said Bell.

Once that is done and all the paperwork has been signed, the clients make a once-a-month payment to CCCS. The company forwards that money, distributing the funds as agreed among the creditors. The client still receives bills from the creditors, with the new, lower balance reflected. That becomes the clients' receipt, in effect, said Bell.

It is usually better to try to resolve the problem, Bell said. But, if clients do need legal advice, or think they can't avoid bankruptcy, they are referred to a lawyer.

CCCS clients who don't arrive as word-of-mouth referrals come from creditor referrals. Creditors are more than pleased to refer customers, since their chances of getting paid increase when the CCCS is used.

Bell noted that though it may be obvious to some, many don't understand that you can't get out of the hole financially by piling up more debts.

As visual proof of the company's commitment, a most striking piece of artwork greets the visitor to a CCCS office: a 3-foot-by-3-foot collage of cut-up credit cards hanging on the lobby wall. The cards are pasted to the frame so that no names are visible.

Tony King paid his first visit to Bell on Sept. 17. He was referred by friends.

``And I'm in the shopping center a lot. I saw their sign and came in to talk,'' said King, who shops at the next-door Food Lion.

He was laid-off from his job as a maintenance man for a Churchland apartment complex in March. King is married. He and his wife, a working mother, have two children. A graduate of Computer Dynamics Institute, he has recently begun working as a computer technician.

King fell into the first of the two major categories of clientele who seek CCCS's help. He lost a job. Others fall behind because of marital discord, separation or divorce.

King said he was ``a little behind and trying to play catch-up.

``I'm already on a budget, so David is helping me with my credit-card debt. If I do what he instructed me to, I shouldn't have any trouble.''

Bell reviewed King's credit conundrum. King owned a mere two pieces of plastic. His case is mild, Bell said. They agreed to meet again, to set up a program to reduce King's credit-card burden.

It's not uncommon for clients to pay $1,000 a month to settle their debts. Bell once had a client who paid more than $2,000 a month.

Most of Bell's clients are hard-working, well-meaning folks who often don't possess the financial acumen to deal with the plethora of credit-card offerings and the fine print on the applications.

Bell views his role as part financial counselor, part psychologist, part educator. Bell is, in fact, the former, a certified financial counselor. He received that certification after taking a 3-month course last year.

He points out to his clients that all that glitters is not gold; that the card which shows an initially appealing rate may escalate in the near future.

Credit cards, for example, come with either variable-rate or fixed-rate interest, Bell said. The consumer can choose the type, but many of the clients Bell sees don't bother to read the fine print. They only see that they've been issued a card and that it looks attractive.

``What happens is the issuer offers what we call the teaser account,'' he said, speaking of the common variable-rate card. ``It starts out at 6 percent interest, then usually goes up to 10 (percent) after six months.''

It can climb after a year - up to 20 or 22 percent. Or more. Bell once had a client who was paying a whopping 32 percent.

The variable rate is pegged to the prime interest rate, the benchmark of financial transactions. The fixed-rate card is, well, rare, he said.

Most cards are of the more expensive variety. And those are the cards that get people into trouble.

``If someone asked you if you wanted a card at 50 percent, would you take it? Of course not,'' he answered his own question with a smile.

``On a $5,000 account, you can make a $100 payment and $50 will go to interest. Is that 50 percent? It sure looks like it if it's your $100 payment,'' Bell said, shaking his head and clicking the ball-point pen he had been using to make the calculations.

Bell does not blame credit-card issuers. They are in business to lend money, to offer services that consumers find attractive.

``What we try to teach is the `D' word,'' said Bell. ``Discipline.

``Have your bill money that you don't touch and your play money that you can touch. It's so easy to pull out a card instead of cold cash. But, why not buy that VCR this month and that TV next?''

Bell even posited his own version of the television ad of a few seasons back that posed the dilemma: Pay me now or pay me later.

``And later, you're not going to be paying a dollar for that purchase, you're going to paying $1.10 or $1.25.''

For more information about Consumer Credit Counseling Service, call 488-2227, or visit the office at 5600 Portsmouth Boulevard. ILLUSTRATION: Staff photos by IAN MARTIN

Leah Anderson, office secretary for Consumer Credit Counseling in

Portsmouth, takes collects a monthly payment from one of the

service's clients.

David Bell stands in front of the the company's collage of snipped

credit cards.

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