CREDIT CARDS USE & ABUSE

"Patrick" doesn't want to attach his real name to the true story of his credit card downfall.

Little wonder. He ran up a Visa bill to $1,500, begged his parents to pay it off, and then ran the card up to another $1,800. Nobody wants to admit to such damaging financial irresponsibility.

Patrick was 17 when his mother helped him get his first credit card with a $500 limit, "just for emergencies." They thought it would be pretty harmless with the relatively low limit, but found out differently.

"Little did I know that they would let you keep charging after you hit your limit and just charge you an extra fee," Patrick said. "When my parents paid off my first debt, the credit card company raised my limit to $1,500 and opened the door for me to spend even more."

Today, Patrick is 24, and the high interest rate on the card eats up his sizable payments. While the card itself was cut up long ago, the debt will hang over his head for years.

A modern proverb says credit cards can be plastic daggers for committing financial suicide, as Patrick and many others have found out. Some people stall vital medical and dental visits due to mounting bills, and most have no savings at all.

When people hit rock bottom, they often go to see William Holly or another adviser at Consumer Credit Counseling Service on Independence Street. By the time Holly sees them, their financial problems may have led to a divorce, poor health or other related problems.

About 85 percent of his clients have abused credit cards. They get the cards believing they will pay them off month-to-month, but when the bill gets there, the money must go somewhere else.

When they see how easy it is to make the minimum payment, they keep making it. The charges continue, the interest accumulates, and they are stuck.

"Credit cards are designed to be paid off each month, but credit card companies don't present them like that," Holly said. "They may advertise a low 7.9 percent interest rate, but if the cardholder is paying it off every month, he doesn't have to worry about the interest."

When people see themselves slipping into a black hole of debt, Holly suggests they call Consumer Credit Counseling for help. The not-for-profit organization employs counselors to look at clients' incomes and their bills with the goal of getting their debts paid in three years.

Some only need a budget. Others need CCC to take over their debts, so they can pay CCC a lump sum each month and the counselors can pay the bills.

In some cases, counselors are able to cut the amount of interest being charged on credit card accounts.

There's one catch -- clients must cut up all their credit cards and swear to keep out of additional debt as long as they are under CCC's care.

If someone doesn't feel they are so bad off that they must consult CCC, Holly said, there are practical ways to keep out of major financial trouble.

He suggests making changes in one's lifestyle, perhaps eating out less or trading off an expensive car for a cheaper one. Another solution is to get a part-time job and apply all the earnings to debt reduction.

And if someone is determined to hold on to a credit card, he shouldn't carry it with him. The freezer is a safe place, or a safe-deposit box at the bank.

Holly said he wasn't against credit-card use, because cards are handy for making motel reservations and renting cars. It's misused when someone carries them around, taking them out for every want.

"In my experience, if you carry money, you spend money," Holly said. "Just carry 50 cents in your pocket so if you need to make some phone calls, you can do it."

Are you in financial trouble?

1. Having past due bills.

2. Being broke between paychecks.

3. Robbing Peter to pay Paul.

4. Paying out more than 25 percent of income for installment debt.

5. "Maxing out" credit cards.

6. Depleting savings.

7. Worrying about money all the time.

8. Stalling medical and dental visits because they are too expensive right now.

9. Making the minimum payments on debts.

10. Paying in 60 or 90 days bills that once were paid in 30.

11. Taking out a new loan before an old one is paid.

12. Losing track of how much money is owed.

13. Working overtime to make ends meet.

14. Being threatened with legal action or repossession of a car.