This year the holidays were particularly joyous for John and Sheryl Martin.
Chili and videos on Christmas, and board games on New Year's Eve with their two sons, David, 21, and Mike, 20. All in their first house.
The four-bedroom rambler marks the end and the beginning for the Hutchinson couple. It ended a marathon fight out of debt. It took them four years and eight months, but their $35,000 in credit-card debt is now gone.
"Having the house and the furnishings, that's our gift to the family," Sheryl said.
As many Americans face a different kind of holiday tradition -- January's credit-card bills -- the Martins are both a cautionary tale and proof of happy endings.
The credit-card debt that started with one card and one charge in 1993 and ballooned to 15 cards and a dark pit ended last month, when the Martins sent their 56th and final monthly payment of $785 to a debt management program. A few weeks later, John, 59, and Sheryl, 44, bought their maiden home -- with a cozy basement, a two-car garage and a city park alongside it.
"Credit cards are a thing of the past for us," John said. "Looking back, the biggest thing to me is that we really didn't have much to show for all the money we spent."
Millions of Americans have hocked their futures with credit cards. In the first nine months of this year -- before the holiday splurge -- consumers had accumulated $920 billion in revolving debt, up from $877 billion for all of last year, according to the U.S. Federal Reserve.
This holiday season, Americans will put about $148 billion in retail sales on their credit cards -- a year-to-year increase of about 10 percent when overall spending is expected to go up less than 4 percent, according to CardTrak.com, a credit information company.
Meanwhile, one in six families makes only the minimum monthly payments on their cards. And one in six Americans carries balances of more than $10,000.
The spiral descent
The Martins got their first credit card 14 years ago, mostly to establish a credit record for themselves, John said. They took out a car loan about the same time. Longtime apartment complex managers, the couple never held a mortgage.
As the card limit rose each year -- $1,500 to $2,500, to $3,500 and so on -- they kept raising their spending to match. John said his weaknesses were Mystic Lake and baseball cards, although he mostly remembers buying things for others.
They started getting offers for more cards, including some with 0 percent introductory interest rates. Sheryl thought it would be a good idea to park some debt from their other cards on those, but in the end what happened is they had more cards, which they used to spend more.
"Through the year, we'd kinda pay them down, then at Christmas they went back up to the maximum," she said.
The couple remembers no bright moment of revelation, just a simultaneous dawning that they were never going to pay off their debt the way they were going -- and another simultaneous sense that they were ready to be done with credit cards. That's when they called Lutheran Social Service.
"Honestly, we never thought of bankruptcy," John said. "We spent the money. It was our debt, our own stupid fault, and we were going to pay it off."
Getting help
The Lutheran Social Service debt management program is half financial education and half debt repayment, said Darryl Dahlheimer, a program manager in Minnesota. Counselors teach clients how to make and keep budgets, and then handle their debt repayment: Clients write one check to the agency, which then distributes money to their creditors, many of whom have already agreed to drop their interest rates.
"People call in just for support, too," Dahlheimer said. "We had someone tell us, 'I'm calling you because otherwise I'd be at the mall.'"
Another crucial step: Clients have to cut up every credit card.
The Minnesota program usually has about 2,000 clients at any time, and about 54 percent hang in to completion -- about the industry average, Dahlheimer said.
Minneapolis financial counselor Tara McCarthy said many of her clients prefer a different approach to paying off their credit-card debt. They want individual workouts, so she helps them strike interest-cutting deals with each creditor, and then they go handle their own repayment schedules, McCarthy said.
Gail Cunningham agrees formal programs are not for everyone. She's the spokeswoman at the Maryland-based National Foundation for Credit Counseling, an industry membership association.
The people who walk in its members' doors fall into three groups, Cunningham said: One-third need only brief help, often to get through a temporary problem like a job loss; one-third are referred to other help, like public assistance or Gamblers Anonymous; and one-third go into the formal debt management programs.
All three approaches have the same final goal for clients: financial self-management. "I like to say we are the only company I know of that doesn't want any repeat customers," she said.
Four years, eight months
The Martins found the long repayment checks surprisingly doable.
"There were times when it was tight," Sheryl said, "but they didn't feel like a hardship because they came to about what we'd been paying, anyway."
It was also easier to make one payment than the dozen or more before, Sheryl said: "Before, bills would come in and I'd have to sit down and write checks for hours."
John calculated they saved $400 in postage over the years. But the best were the monthly card statements with their shrinking balances.
"We were so happy that the amounts were finally going down," John said.
H.J. Cummins • 612-673-4671