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In debt? Watch out for the holidays.

Jingle Bills


Ka-ching. Would you like to put that on your credit card?

For 28-year-old Jamie, the answer will be an unequivocal no this holiday season. Jamie cut up his three credit cards this summer and sought help from a debt counselor after his combined balances reached more than $15,000.

I incurred that much debt and I can't even show anything for it, he says, shaking his head in disbelief. No one huge purchase took a big chunk of it. é It got to the point where if I wanted it, I bought it. It is a great feeling to be able to do that.

The National Retail Federation's 2001 Consumer Holiday Outlook survey shows American consumers plan to spend an average of $940 per household on gifts, decorations and food, despite the recession. They will charge an estimated $121.4 billion to major credit cards, with Virginians racking up about $3.5 billion in charges between Thanksgiving and Christmas, according to credit-card information site

That buying rush often results in a post-holiday debt hangover, says Carolyn Spohrer, area director for Consumer Credit Counseling Service of Virginia. The not-for-profit debt-counseling agency works as a mediator between debtors and creditors to help people come up with a plan to pay their credit card bills.

It usually gets slow around here before the holidays because nobody wants to cut up their credit cards before [Christmas], Spohrer says. After the holidays, when the bills start to come in, we see a real spike in business. A lot of clients we see now are still paying for last Christmas and maybe the Christmas before that, because they put it all on credit cards instead of setting limits.

In 2000, Spohrer's agency, which has offices in Virginia, North Carolina, South Carolina and Maryland, assisted more than 18,500 people with an average credit card debt of $12,643 and average annual income of $29,000.

There are so many causes for [credit card debt], Spohrer says. OWe see it all, from one end of the spectrum to another: from professional, well-educated doctors, lawyers and accountants, down to older people and widows whose husbands always took care of the money through young students who get to college and at the bottom of the first shopping bag when they buy a T-shirt at the bookstore, they find two or three credit card applications.

Jamie, who works in security control for a major local financial institution, sought help from Consumer Credit Counseling when he was having trouble paying about $360 per month just to meet minimum credit-card charges. The situation was that it was going to take me years and years of paying the minimum balance [to get out of debt], he says. Basically, I just kind of realized for me to have anything I wanted in the future I had to take care of the present. It was a very humbling experience to have to finally cut out spending altogether. You have to learn how to live with what you have and try not to want.

Jamie charged CDs, restaurant meals, drinks, trinkets for his apartment, a computer and Christmas gifts on his credit cards. The last three Christmases I basically bought everybody what they wanted, he says. But this Christmas things are very sparse.

My [financial] situation has drastically changed Christmas. It will be just as good as any other, but it will be different [this year].

Things will be different, too, for Rena, 28, who works in consultant support for a local accounting company. She has retired her five credit cards in hopes of catching up with her $5,000 in combined debt. I havenOt offically cut them up yet,O she says. I am trying to have faith within myself thinking I can do this.

Rena plans to do her holiday shopping at dollar stores and warns that her nieces and nephews won't be getting all the fancy things and fancy toys the market is putting out. You try to buy nicer things if you have a card, because you know you can pay it off in payments. Then when the bills come you think, Why did I do that?

Part of it is conditioning, Spohrer says. There is a perception that you can't live without these items. Marketing does a great job of convincing people that we have to have all these [things]. The other part is easy availability of credit cards and a buy now, pay later mentality. Credit is just so prevalent today, she says.

For Ian, 26, there may not be any presents under the Christmas tree this year. Not only is he struggling to pay off a $1,200 credit-card debt (and he doesnOt even want to think about $40,000 in student loans), but since September he has joined the increasing ranks of the unemployed.

ONot having a job has made things exceedingly tight this year, he says, about a month before Christmas. I have a two-week window where I have to get a lock on [a job] so I can get a paycheck for Christmas. I will go work at McDonaldOs if I have to.

When he was about 19, and a freshman at Virginia Commonwealth University, Ian applied for his first credit card on campus after his car broke down and he needed to buy a new one so that he could continue to work as a pizza-delivery man to pay his bills.

He took a cash advance of about $500 to buy a junker and spent another $500 getting it to run. And before he knew it, he had exceeded his card's $2,000 limit and was having trouble meeting his minimum payments. I was not old enough to drink, he says, but I was old enough to owe someone thousands of dollars.

Ian quit school to work full time to pay off his debt, but was only making $7 an hour and still wasn't getting ahead. He applied for a second credit card so that he could pay off his first and have money to live.

Eventually, he sought credit counseling once his debts reached more than $3,000 and every piece of mail I received said, this account is past due.

Today, Ian has no savings, no bank account and a ruined credit history. He has about a year to go before he pays off his credit-card debt. It is a really hard hit to your ego to not have any money, to not have your name on the house that you and your wife have together, he says. It's definitely built up a lot of stress.

Rena feels that stress, too, every time she gets a credit card bill. You try not to give up and feel like you're a failure, but sometimes the bills can overwhelm you, she says. You can feel depressed.

To try to avoid that feeling she is cutting back. Christmas this year is a whole lot different, she says. Not only because of the 9-11 situation. That plays a big part because you start to value a little bit more this year. It is not about gift giving this year. It is about spending quality time with your family and hoping everything is safe, and hoping nothing else happens.

To reach the Consumer Credit Counseling Service of Virginia Inc., call 222-4660, or outside the Richmond area, 1-877-877-1995. Or, visit the organization's Web site at

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