THOSE CRUSHING DEBTS COMMON SENSE STEPS CAN HELP YOU SHOULDER YOUR FAMILY'S POST-HOLIDAY BURDENS.

Byline: Evan Pondel Staff Writer

Jeanette Scott didn't use her credit cards for holiday shopping this year - the memories are too painful.

Racking up more than $5,000 worth of debt year after year took its toll on the Lake Arrowhead mother of four.

``I don't know how we did it; that was a lot of money for us,'' said Scott, 53, who lives with her husband in the San Bernardino County mountain town. ``I can just remember the pressure.''

Painful memories for Scott are present-day realities for consumers now that the holidays have passed and the credit card bills are showing up in the mailbox.

Consumer debt is estimated at nearly $2 trillion. So what is the best way to dig yourself out and stay that way in 2005? Credit counselors say the first step is confronting your debt head on and setting reasonable goals.

``And that probably means you'll have to start charging less,'' said Robert Pittman, director of fund development at ByDesign Financial Solutions, formerly Consumer Credit Counseling Service of Los Angeles. ``Obviously, there are many ways to motivate yourself. But you should look at tackling debt like winning small victories. Building in a little redemption, a little payback, will go a long way.''

That could prove helpful to the 64 percent of Americans who expect to experience some form of financial difficulty following the holidays, according to an October survey by LowerMyBills.com. Of the more than 300 people age 25 and older surveyed, 80 percent also considered money their No. 1 post-holiday worry.

Pittman suggests that, to chip away at severe credit debt, you should transfer all of your balances to a single card - preferably one that has a low interest rate. But be sure to close all other outstanding credit card accounts.

Also, try paying a little more than the absolute minimum. LowerMyBills.com found that if you put $1,000 on a credit card and only pay the minimum monthly fee, it will take an average of almost 22 years to pay off and will cost you more than $3,000. And with interest rates on the rise, consumers can expect even higher credit card charges.

``Paying a little more than the minimum will help you at least make a dent in the principal,'' said Kathy Warner, card services manager at Pasadena-based Wescom Credit Union. ``But don't get too confident. You have to beware of sneaky fees.''

Credit card companies may dangle low rates to attract your business, and then hit you with a back-breaking fee as soon as you are one day late on your payment, Warner said.

That raises another question: How frequently should you pay your credit card bill? Anand Sheth, a financial adviser with American Express in Claremont, said consumers should pay off their credit card balance every two weeks. ``That doesn't mean every time you get a paycheck,'' he said, noting that paying your bills the first and 15th of every month will only take care of 24 pay periods. Paying the bill every two weeks will account for at least two more periods.

Such stringent financial discipline can be tough during the holidays. And attempting to repair your credit card debt can be mentally draining. ``Call it a debt hangover - it leaves you with a lot of residual guilt,'' said Daniel Pena, education director with Springboard Non-Profit Consumer Credit Management for Riverside and San Bernardino counties. To avoid feeling overwhelmed by debt, Pena says, consumers ``should start acknowledging what makes us spend so much. Do we have to buy gifts for everyone?''

The answer varies on your financial situation. To glean a clearer picture, Pena said, consumers should balance their checkbooks to find out how much debt they have specific to their credit cards. ``What people don't realize is that Christmas shopping could put you five to seven years from paying off your debt.''

Pena also advises consumers to check their credit reports. A new law enacted last month allows consumers to obtain a free copy of their credit report every year from each of the three major credit bureaus - Equifax, Experian and TransUnion.

Should none of the above strategies work, it could be time to sit down with a credit counselor.

``They'll help you with a budget, and also help take away the worry about getting a call from a debt collector,'' Warner said.

Springboard will sit down with consumers for free to determine whether they need more support. If they decide a debt management plan is appropriate, consumers can expect an initial enrollment fee of $50, and monthly fees of no more than $20. More information is available at www.credit.org.

And then there are some habitual practices that can help whittle down your debt. For example, start taking your lunch to work. ``Even spending $5 twice a week for a year adds up. That money could make a good dent in your debt,'' Warner said.

Ideally, consumers should not feel they have to sacrifice after the holidays. And to avoid such a scenario in the first place, creating a holiday budget is probably among the best preventive measures. Cash reserves can always help bail out an overzealous shopper Sheth said.

``I go through this every year with a lot of my clients. So first things first: Next year, set some money aside before the holidays happen.''

Evan Pondel, [phone]

evan.pondel(at)dailynews.com

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(color) no caption (Woman carrying oversized credit card on back)

Knight Ridder Newspapers

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CREDIT CHECK

Source: MDRT Holiday Spending survey of 1,000 respondents