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A Thing It takes Guts


40% of the Population Totally Check Dependent


W e regularly point out that a very large portion of the population uses checks to pay for goods and services, because they cannot qualify for credit cards. It has become apparent that there is also a large and growing portion of the population that has either lost their credit cards due to poor payment practices or have voluntarily cut up their cards to escape the credit card world.

As an example, Bertha Garcia of Anaheim, CA has never taken out a loan or paid on credit in the 18 years she’s lived in Orange County. The print-shop worker, 34, once applied for a Visa card, but was turned down because she had no credit history. Kathryn O’Shaughnessy has more than enough experience with credit cards. The federal government worker, 58, once racked up more than $16,000 in bills and fended off collection-agency calls demanding payment.

The two women represent opposite ends of the credit spectrum—one trying to build a credit history, the other trying to salvage hers. And they have plenty of company. More than 25 million Americans cannot get credit because of troubled or nonexistent credit histories, a MasterCard survey finds. Either they’ve ruined whatever credit rating they had through late payments and bankruptcy, like O’Shaughnessy, or they’re students, young adults, or immigrants, like Garcia, who are new to the world of deferred payments.

O’Shaughnessy’s story represents a growing number of consumers who have turned away from credit card use. Rather than apply for more credit cards, she cut up the ones she already had. O’Shaughnessy’s credit history was marred by a 1986 bankruptcy, the result of a divorce and financial responsibility for two teenage daughters. “I tried to keep our lifestyle as close as possible to what it was before the divorce,” O’Shaughnessy said. “It was a mother’s pride.” The bankruptcy cut her off from most credit except for her department store cards, which she used until her creditors started calling again.

But one of the creditors had a suggestion: Check out Consumer Credit Counseling Service, a nonprofit agency largely funded by banks and credit-card issuers. The service helps clients consolidate debt. It serves as a mediator with creditors and teaches budgeting, shopping techniques, and responsible use of credit.

Given the fact that those of us who are lucky enough to have a credit card generally have multiple cards (industry reports say 3.2 cards each), we must remember that many consumers rely on their checks for payments.

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