About four years ago, Danny Keith Duncan owed more than $10,000 in credit card debt.
Since then, the 43-year-old Clovis resident has learned the secret to staying debt-free — self-restraint.
Facing debt, his income was $581.54 a month. Not wanting to declare bankruptcy, Duncan sought another option — Consumer Credit Counseling Services of Greater Dallas Inc.
With the help of CCCS, he became debt-free in January.
“You just set yourself on a budget and follow it,” Duncan said of the CCCS program. “You don’t buy anything you don’t need.”
CCCS is a not-for-profit accredited agency focusing on helping consumers get out of debt.
Certified counselors help consumers find solutions to their financial needs, said Manager/Counselor Brenda O’Shea of Clovis.
Like Duncan, she said, the majority of consumers she helps are trying to get out from under credit card debt.
Duncan said he got into debt by purchasing a computer with a credit card, joining a gourmet club on the Internet, and using credit cards for cash advances.
“You don’t take cash advances on a credit card if you want to stay out of debt,” Duncan said. “You don’t rob Peter to pay Paul.”
O’Shea said reasons why consumers fall into debt can vary — from overextending, like Duncan did, to job loss and relocating.
“Sometimes, consumers just make late payments, and the late fees coupled with the credit card payments are too much for someone to handle,” O’Shea said.
Late fees ranging from $20 to $30 a month can be added to credit card debt, as can over-limit fees and finance charges. This all is in addition to the minimum payment.
“The fees add up every month until that minimum payment is met,” O’Shea said. “For example, If you owe a minimum payment of $89.52 and mail in $25, those fees still apply.”
When Duncan sought O’Shea’s help at CCCS, she listened to his concerns and goals, and reviewed his income, his spending habits and his debts.
“The analysis was in-depth and customized,” O’Shea said.
Under the agency’s repayment and debt management plan, she said, consumers can lump their debt into one payment a month while the agency disperses payments to creditors, as Duncan did.
As a result, his interest rates and payments were reduced by guidelines set by his creditors.
To pay off his debt, he stayed on the budget plan he and O’Shea created.
“Really, it’s a self-help program,” O’Shea said of CCCS’ services. “If consumers go on our program, all credit card accounts are closed.
“You hand them the credit cards, and they take the scissors out and cut them up in front of you,” Duncan said.
The creditors, however, are the ones who actually close the accounts, O’Shea said.
“Payments are made until all the debt is paid off.”
Some of O’Shea’s clients have told her they’re concerned that going to an agency to pay off debt will harm their credit.
“When a person is late making payments, their credit already is affected,” she said. “A management program can improve that.”
Bankruptcy, however, may still be the only alternative.
Duncan said a friend of his owed $42,000 in credit card debt and had no choice but to declare bankruptcy.
He said he feels fortunate that didn’t happen to him.
Now that he’s debt-free, he said he won’t buy something unless he has the money already in hand to pay for it.
“I know how to budget,” he said. “And I learned you pay the full bill when it’s due.”
Gail Cunningham, vice president of Consumer Credit Counseling Services of Greater Dallas Inc., said the agency is good because it provides an advantage to consumers in debt.
“I think that a consumer who feels overwhelmed by debt lives with that feeling 24 hours a day,” she said. “We can put three decades of service to work for them.”
Duncan said he agreed with Cunningham.
“I had to give up a lot of things,” he said. “But now I’m preparing to get my latest credit report. These people are pretty good.”
“It’s their money,” O’Shea said.
Chances are, they’re going to be a lot more choosy about how they spend it, or they may even try to save the money by buying less expensive treats.
And, because it’s their money, Mom doesn’t have to run to the ATM machine after work to get cash.