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Christmas without credit

Mail Tribune file photo

Local residents find reasons to celebrate -- lower debt, no plastic

The fear of mailboxes has almost left a Medford woman we'll call Shelly.

In years past, postal carriers would be bringing a series of paper holiday hangovers any day now: credit card bills -- big ones.

I dreaded going to the mailbox every day, says Shelly, who asked that her real name not be used because she just started working her way out of $17,000 in credit-card debt. It was a joke between my boyfriend and I that I won't go to the mailbox.

But the 28-year-old made a break for better finances -- and less daily mailbox dread -- in September, cutting up her credit cards and getting help from Consumer Credit Counseling Service.

This was my first cards, she says. I got rid of every credit card -- gone.

I feel so much better. I've had to change my lifestyle, but I look at it and I'm so much happier now.

Nationwide trends indicate that more people are pitching their plastic -- or at least using it more carefully. Though local credit counselors haven't seen fewer people seeking help, there are people successfully staring down their debt demons.

April Roemer is one of them. The 21-year-old Medford police community service officer built up $4,000 in credit-card debt while attending Southern Oregon University.

You go to college and they sit outside at their little tables with their free little gifts and you get sucked in, she says. I've seen it ruin so many people's lives.

Two years ago, she got rid of her credit cards and, with help, began knocking her debt down. She's more than halfway through.

The holiday season is ground zero for people who struggle with consumer debt.

Not many of us are going to let our children go without Christmas, says Nancy Perry, the senior counselor at the counseling center. You have to be realistic or it's not going to work.

It is a difficult time for people who overextend themselves, said Linda Cade, another counselor.

Counselors encourage people to include gifts -- Christmas and otherwise -- in their year-round budgets and buy some presents early to spread the financial burden. The center offers free monthly budgeting classes, and counseling to help people climb out of debt is also free.

We help them review what options they have, Cade says. We are nonjudgmental. We understand that people just want to do better and that's why we are here.

To keep herself on track, Roemer went the cash-only route for Christmas presents, doing some on layaway.

I saved a bunch of money and paid for everything with cash, she said. It was such a relief. I don't have it hanging over my head for the next year.

The way Christmas bills lingered helped convince Roemer it was time for a change.

You are paying two or three times what you paid for the present, she says.

Shelly's family got in on her efforts for a fun but financially scaled-down holiday season.

Couples in the family bought five gifts -- each for under $20 -- and didn't label them for any one person. Then they made a game of taking turns picking presents -- low-cost but nice things like a refinished office chair that was going to be thrown out or a vintage thrift-store picnic basket filled with cider and wine.

My family just agreed to take out the stress. Getting together is almost present enough, Shelly says. I got some really great gifts this year, and they weren't expensive at all.

And best of all, the season of giving isn't followed closely by the season of grief as the bills come in.

This is actually one of the best Christmases as an adult that I've had, Shelly says. It's kind of like a second chance to figure out what to do, to be more realistic.

Now I feel free.

— — Americans may be — reining in their debt

Wire and staff reports

Weaker-than-expected holiday sales may be disappointing merchants, but some economists — and credit counselors say the figures could be the latest sign that Americans are finally — getting their debt loads under control.

Delinquencies on credit cards and loans are down significantly from a year ago, and — more consumers say they are paying off their credit card bills.

Caseloads at debt counseling agencies nationwide are flat -- although that trend hasn't — reached the Consumer Credit Counseling Service of Southern Oregon just yet.

Nancy Perry, the senior counselor at the Medford office, says she hasn't notice a — decline yet and still expects heavy caseloads over the next three months.

January, February and March are always real busy, she says. The counseling — service works with about 1,100 families from Jackson, Klamath and Siskiyou counties each — year.

The National Foundation for Consumer Credit, an umbrella organization for nonprofit — Consumer Credit Counseling Services, said client caseloads have leveled off at 1.5 million — for the past two years after several years of double-digit increases.

Economists who track consumers' financial health say the summer stock market correction — and a widespread assumption that the economy must eventually slow have kept consumers wary — enough to keep their debt in check, at the same time that lower interest rates and a — vibrant job market have made it easier to pay off obligations.

Although the evidence points to a stabilizing trend, Americans' debt load isn't — shrinking. U.S. savings rates remain historically low, and debt payments have risen to a — near-record proportion of take-home pay.

But concerns about widespread delinquencies have eased.

Overall, debt loads still remain at or near all-time highs. The percentage of take-home — pay spent on nonmortgage debt in the United States has climbed to more than 18 percent, — the highest levels since the boom in spending that followed World War II. As a general — rule, credit counselors urge consumers to seek help when their individual debt load — reaches 20 percent of take-home pay.

While consumers are still saying Charge it, their enthusiasm for plastic — appears to be moderating. After 25 percent increases in 1996 and 1997, credit card debt — rose just 8 percent this year, according to CardWeb, a credit-tracking service.

A November survey of 800 adults conducted for the American Bankers Association found — that the number who planned to pay off their bills in full at least some months out of the — year more than doubled since this summer, from 20 percent to 42 percent. The proportion of — consumers who say they always pay off their debt remained steady at about 23 percent.

Delinquency rates on all major forms of consumer debt have eased, with seriously late — payments on bank-issued credit cards at 3.28 percent of total card debt, down from 3.53 — percent a year ago and well below the late 1996 peak of 3.72 percent.

Economists say holiday shoppers, like these sale seekers at the Rogue Valley Mall, appear to have controlled their credit-card spending this Christmas.