[ Golden Gater Online - September 11, 1997 ]
When Bethany Cirlin first became a student at SF State in 1993, she did not have a single credit card. Within two weeks, she was approved by three major credit companies and her nightmare began. She accumulated more and more debt and eventually used one credit card to pay off another.
Cirlin's story is not unique. The ability to buy now and pay later is hard to resist for students, most of whom struggle financially.
However, the price of paying later can be unexpectedly high. Overwhelming credit card debt can cause students to be hounded by creditors and in some cases, declare bankruptcy said Candy Acezedo, director of education at Consumer Credit Counseling Service, a company that helps consumers consolidate and repay their debt.
Cirlin stopped budgeting her money and began to live off her cards. Within 18 months, Cirlin was unable to pay her credit card debt except by taking cash advances on other cards. Soon she stopped paying all together.
"Creditors called my house from 7:30 a.m. to 10 at night," Cirlin said. "I could not work enough hours in a week to start repaying them . It felt like an anxiety attack coming on."
Nagging creditors is only one problem with having unpaid debt. According to Acezedo, personal credit history is affecting more aspects of our lives than it did 10 years ago.
"It's a character reference that's looked at more often," Acezedo said. "These days everyone from landlords to insurance companies to employers is pulling credit reports."
Subsidized by the credit card industry, CCCS is a nationwide company that helps people like Cirlin manage their debt. According to Acezedo, credit companies have a vested interest in educating credit users because knowledgeable consumers are less likely to get overwhelmed by credit card debt, leaving them in a better position to make timely payments and avoid bad credit and bankruptcy.
Education is the primary function of CCCS. According to Acezedo, consumers are more careful when they shop for clothes, cars and homes than when they shop for credit. Acezedo said it's important for young people looking for their first credit card to understand what type of program best suit their needs.
"Students have special needs because they are just starting out," she said. "We teach the students how to shop for credit and not just sign on first dotted line."
It is important that students choose their credit cards carefully and read the fine print, Acezedo said. She also suggested looking for a program that offers no annual fee and a interest rate of 12 percent or lower. She also advised paying the bill in full before the end of the 21-day grace period. Such measures, combined with keeping the overall number of credit cards down, should prevent out-of-control debt.
CCCS also has a program to help students who find themselves unable to make payments on their credit debt as Cirlin did.
Once enrolled in the program, which costs $1 per month, CCCS takes on the responsibility of negotiating a payment plan with creditors so students can begin to pay down their debt and not worry about collectors calling their homes in the middle of a dinner party. All financial obligations are consolidated into one payment to CCCS, which then distributes the payment to creditors. To prevent further debt while in the CCCS program, students must agree to give up all credit cards. The service also provides free seminars and workshops at the downtown office. All consultations are confidential and free of charge.
For more information about CCCS contact the San Francisco office at (415) 788-0288 or visit its website at http://cccsmoneymatters.org.
Cirlin is grateful to CCCS for the help in managing her debt and getting her finances back on track. It has been 18 months since she has enrolled in the program and she already managed to cut her debt in half.
"I won't do this to myself again," Cirlin said. "It's the most awful feeling in the world."
[ Golden Gater - September 11, 1997 ]