Newspaper article THE JOURNAL RECORD

Installment Debt about 19% of Disposable Income

Newspaper article THE JOURNAL RECORD

Installment Debt about 19% of Disposable Income

Article excerpt

Did you overspend your income this holiday season? Now that the festivities are over, are you being hit with shopping bills and worried that you will not be able to meet monthly payments?

If so, you are not alone.

As the nation attempts to dig itself out of debt, you, a typical American, have been fighting your own personal battle. Bombarded by all types of credit options, you have become more and more comfortable with liability. This installment debt - including everything from the money you owe on your credit cards to automobile loans to cash advances (but excluding mortgage payments) - is hovering around 19 percent of your personal disposable income.

What's more, saving money is on its way to becoming a cliche. Americans saved only 2.8 percent of their personal disposable income in the third quarter of 1987.

``You have to go back before World War II to find comparable savings lows,'' says John Gorman, assistant chief of the National Income and Wealth Division of the Bureau of Economic Analysis in the Commerce Department.

While Americans have been accused of carrying on a love affair with plastic, at this time of year in particular the romance starts going sour for many individuals. During the next few weeks, bells will be heard echoing throughout the 345 offices of the Consumer Credit Counseling Service (CCCS). But the song in the air is not Jingle Bells.

``The weeks after Christmas the phones are ringing off the hooks with people complaining that they didn't consider their car insurance and their mortgage payments and all other bills when they charged their Christmas purchases,'' says Mary Quinn, director of Consumer Credit Counseling Service, a not-for-profit organization affiliated with the National Foundation of Consumer Credit.

``This is when HO, HO, HO turns into OH, OH, OH.''

In 1987, the service's offices counseled more than 176,500 families with debt problems, up from 164,000 families the year before.

``This is not one group or type of person we are seeing,'' notes Luther Gatling, president of the Budget and Credit Counseling Service, the organization's New York office. People from all income levels are seeking help. …

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