September 21, 2006

(Consumer Recovery Network) - This week’s edition of Debt Bytes features a story submitted by a woman in my local area. She has come a long way in her understanding of debt and credit, the good, the bad, and the unbalanced.

She came to her understanding over time, as a result of research and her own experiences. One of the intentions of Consumer Recovery Network is to stream line a consumer’s ability to gather information so that they can compare and understand the options available to them.

The following was submitted to us by a Debt Bytes subscriber:

I will always remember my Mom scrambling at Christmas time, or more appropriately, Christmas Eve. She would drive herself crazy wondering what everyone wanted and where she could find it at the last minute. My sister and I were always, reluctantly, in toe. It never once occurred to Mother that she couldn't afford to buy all these gifts.

I was just a kid, so I didn't really care how she paid for any of these wonderful “things” - I just hoped I had something cool under the tree. She charged every perfume bottle, every book or CD, every toy. She would joke with the cashier, "Luckily, I don't have to worry about it until after the holidays!“ Logical? Maybe.

As it turns out, it wasn't so logical. I later learned she had 9 store credit cards that were either at or over their limits. She didn't have a glamorous or high-paying job, so she hoped for good tips. She'd bury herself in credit card debt at major intervals during the year. School shopping and Christmas were the two that I remember the most. It didn't leave her much of time to catch up before the next holiday or school clothes emergency.

I am now a parent and consumer myself and, not learning from my Mother’s sad experience, I had to fall into my own credit hole as a 20-something. I was literally right where she was, asking CCCS for help. To some extent, that was helpful, but my credit was shot. I had to start on my own, from scratch. It took me two full years to get my credit score back up to a “respectable number”. I must admit, though, dealing with the credit bureaus was more than just frustrating, it was downright maddening! It consumed a major percentage of my time, not to mention, probably many dollars in postage in those two years (“certified mail”). Anyway, I got through it. I now monitor my credit regularly and I recommend everyone monitor their credit reports, even if just for the sole purpose of learning how your score is affected, how often, and why. It’s pretty surprising!

I am now a 30-something who takes her credit very seriously. I don't buy what I can't afford. I DO have a few store cards and one major credit card, but I pay them all off monthly, which, in turn, saves me any interest rates and late fees those nasty little creditors may want to charge me with. It also keeps my credit report looking nice and shiny. I don’t need my credit and I think that’s the big point here. It’s not there to pay for my bills or vacations. It’s there to help me build my credit, so that if a major purchase, like a car or home comes up down the road, I’ll have something to bargain with – my great credit rating.

So, next time you check your mailbox and Capital One or Citibank has sent you an incredible "0% Interest" offer, do yourself a favor and show them 0% Interest!

Our goal is to assist consumers in considering how their options weigh up to their goals. The credit decisions we make today can have long range positive or negative affects. No matter where you are at financially, the more knowledge you have the better prepared you will be. Visit the resource section of our web site and begin or further your education today.

I would like to get your feedback on this or any previous debt bytes articles. CRN is always interested in your feedback, insights, and credit anecdotes.