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February 2005

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ZipUSA: 19886

By Mary McPeak
It's that time again: Write the check to pay for the holiday splurge and mail it to zip code 19886, Wilmington, Delaware. No one lives in the zip code, but several credit card companies get their mail there. On a peak day they receive almost two million payments—enough to fill a Hummer.

Delaware has been good for business ever since Éleuthère Irénée du Pont de Nemours fled the French Revolution and built his gunpowder mills along Wilmington's Brandywine Creek 200 years ago. The mill was the start of the DuPont Company, the city's major private employer for generations.

That role is now played by MBNA, a giant in the credit card industry, which moved to Delaware in the 1980s to take advantage of the state's favorable banking laws.

Consumer debt has become an American way of life, one that many find addictive. Wilmingtonians themselves aren't immune to credit card debt, as profiles on the following pages demonstrate.

Reema Patel Waitress
Maximum debt: $28,000

The flip-flops: $2
The trip to Hawaii to get them: $3,500
"The first class in college should be about credit cards."

"You've been approved." Those were sweet words to Reema Patel when she was in college. With eight credit cards, she wasn't able to pay down the $28,000 she had spent traveling, shopping, and partying by the time she was 21. "I loved having a credit card," Patel says. "I had a great time. I didn't think twice." Patel, now 25, is working as a teacher's aide and waitress to finish paying off her debt on a three-year plan. "I went shopping every day. Now I have to contain myself."

83: Percent of undergraduate college students who have credit cards
4.25: Average number of credit cards per college student
$2,327: Average credit card debt of undergraduate college student at graduation

Jim Fortune Software developer
Maximum debt: $20,000

"All I have to show for it is this couch. I ate like a god for those months. It was just plain fun to spend money."

For Jim Fortune, debt started with a job loss. "I lived off credit cards for three months, then I got a job," he says. "But I still used the cards for restaurants, gas, groceries, vacations, and furniture like this couch. The cards were burning a hole in my pocket." Fortune's most serious spending went into his hobby—customizing his Toyota Tacoma pickup truck. "I like to be different, to stand out," he says. When he hit bottom, the 25-year-old Fortune began paying off his debt and soon moved in with his parents. After six years he had succeeded and saved enough to make a down payment on a house.

53: Percent of Americans who reported in 2004 they usually or always pay off their credit card balance
12: Percent who usually pay only the minimum

Tim Gibbs Director, nonprofit organization
Maximum debt: $29,000

"If it hadn't been for my good credit, this nonprofit wouldn't have survived."

Tim Gibbs, who grew up "in a tradition of service to the community," operates a nonprofit organization helping other nonprofits establish information technology. After the dot-com bust in the late '90s, Gibbs kept the company afloat with his personal cards, but soon found himself $29,000 in debt. "I thought I was doing the right thing," he says. "My employees depended upon me. I saw this was a way to keep things going. I don't blame the credit card companies." Today Gibbs is paying back his debt, has no credit cards, and employs only volunteers.

1,625,208: Individuals declaring bankruptcy in the U.S. in 2003
35,037: Businesses declaring bankruptcy in the U.S.
505: Businesses declaring bankruptcy in Delaware

Mary Rammel Credit counselor to Patel, Fortune, and Gibbs
Maximum debt: $0

"We live in a material world, and people like stuff."

"They always ask, 'Is this the worst you've seen?'" Mary Rammel says about her clients at a credit counseling service. "I always tell them I've seen worse, and I almost always have. They're embarrassed to be here. They all have a situation going on—divorce, some have lost a job, illness. Some have brought me to tears. Others, after they leave, I don't have a lot of sympathy." Rammel often has clients cut up their cards. "How much debt does this represent?" she asks, spreading the cards across her desk (right). "It humbles me. I admire my clients for doing the right thing." All sorts go to Rammel for help: doctors, lawyers, CPAs, postal workers.

604: Number of clients Rammel counseled in 2003
More than five million: Number of people counseled in the U.S. in 2003
Freeze credit card in a block of ice: What some debtors do to avoid using cards.


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