Young and in Debt : Personal finance: Counselors report that more and more youths are getting in over their heads as banks and credit card firms make it easy to say ‘Charge it.’

Joleen Romo was 18 when she received her first Visa card.

“It was easy,” she said. “It was just ‘Sign Here,’ and I got it.”

Romo was going to school and had a part-time job that paid only $500 a month. But that didn’t matter. She had plastic and a $1,500 limit.

So she started spending. She bought clothes. She bought shoes.

“I thought I could buy anything I saw,” she said.

If the first card was easy, the second was a breeze. After she made a few small monthly payments and established a credit record, Romo began getting applications in the mail. Soon, she had a dozen cards from various banks and accounts with department stores. Her credit line soared.

“I went to Europe twice. I took my friends out, anything,” she said. “You use one card and then another. You make the minimum payment. You say, ‘I can juggle this.’ ”

But the day finally came when the North Hollywood woman couldn’t make any more payments--she had accumulated $16,000 in debts and already spent next month’s salary.

At age 24, when most young consumers are just getting their feet wet, Romo was in over her head.

She has filed for bankruptcy.

“It hit me all at once,” she said.

And the other day, the mailman brought yet another credit card application.

Most young people don’t have to go searching for credit. Banks and credit card companies beat a path to their door.

It makes good business sense. New shoppers are likely to stick with the first card they get.

“We view them as long-term banking clients,” said Susan Clevenger, a spokeswoman for Bank of America, which issues both Visa and MasterCard.

So college students with part-time jobs can obtain a card. (At UCLA, one bank recently offered a bag of M & Ms to any student who would apply, according to a campus spokesman.) High school graduates with low-paying jobs can get credit too.

“We market them,” said Gail Wasserman, an American Express spokeswoman. “We’re making an investment that they will become some of our best and most loyal customers.”

But credit counselors--the people who advise consumers on how to climb out of debt--warn that Romo’s story is increasingly common among people between 18 and 24.

“We see a lot of people in that age group,” said John Payne, owner of Financial Alternatives, a Ventura-based counseling service. “It’s been increasing in the last five years.”

The case histories that Payne and other counselors recount are astounding: 19-year-olds with $15,000 worth of bills; college graduates who are $10,000 in debt from a credit card and must also repay a $20,000 school loan.

Financial difficulty is often equated with mortgages, bad investments or failing businesses. Young people are running up tremendous debt at shopping malls and restaurants. Some of them have yet to hold their first full-time job or move out of the family home.

“We have 21-year-olds who are getting ready to file for bankruptcy,” said Richard Pittman of Consumer Credit Counseling Services. The Los Angeles office of this nationwide, nonprofit agency counsels 1,000 people each month, an estimated 150 of whom are younger than 25.

The extent of the youth debt phenomena is difficult to gauge. Banks and credit card companies aren’t willing to say how many of their cardholders are 18-24. Credit researchers say they have yet to compile widespread statistics.

So banks continue to insist--without providing verification--that young consumers are just as responsible as older ones. And credit counselors continue to cite individual horror tales as harbingers of a widespread problem.

The stories begin to sound familiar:

A 20-year-old Reseda woman makes $1,200 a month.

She has one bank card, six store cards, and accounts at a jewelry and a furniture store--all of which used to ring up a $7,000 debt. She has taken loans from her family and pays $535 in monthly car and car insurance payments.

“It’s the typical California story,” Pittman said.

At month’s end, after all payments are made, only $25 is left.

And this woman lives at home.

“If her parents kicked her out of the nest, she’d be in big trouble,” said Pam Tobias, the office manager at Consumer Credit Counseling Services.

Michelle Allison, a 20-year-old data processor, applied for her first MasterCard because she needed it to cash checks. Then, she found she could get more credit cards.

“I was so excited about getting so many so fast, I went out and used them all,” Allison said. “All I could think was ‘I have to have those shoes.’ If I had $20 and a credit card bill due, I’d go out and spend the $20.”

Her debts soon grew to $10,000. Allison knew she was in trouble when she couldn’t make the loan payment on her $18,000 car.

Now, her paycheck goes to Financial Alternatives. For a monthly charge, the service pays her bills, deposits some money into her savings and gives her a limited amount of cash each month.

“I need someone to teach me how to spend money,” she said.

Machalle Ferrari and her husband got a Citibank card with a $1,500 limit. “Right off the bat,” she said, “the temptation was hard.”

Ferrari is now divorced and bankrupt. And her credit cards?

“I got rid of them. I don’t want anything to do with them,” the 24-year-old Ventura woman said. “If I can’t pay cash for it, then I don’t need it.”

She insists that most people her age don’t know how much trouble they can get themselves into by paying with plastic.

“I have a girlfriend who’s a teacher and she’s running her credit cards all the time,” Ferrari said. “She’s still paying for last Christmas.”

Most banks and credit card companies offer lower credit limits--between $300 and $3,000--for first-time cardholders.

However, young consumers can multiply their spending power by obtaining cards from numerous banks and stores. They can also buy cars and appliances on payment plans.

Credit counselors see a cruel irony here: The more cards you have, the easier it is to get another.

“It’s a snowball effect,” Pittman said.

And young married couples can get caught in a blizzard of spending.

“They go to Wards and charge a washer and dryer and it’s an easy $15-a-month payment,” Pittman said. “You do that sort of thing for a stereo, some furniture and a television at other stores, and all of a sudden it’s a $200-a-month payment. Then you tie on a car and car insurance and . . . it spells disaster.”

College students--who banks say can obtain cards easier than anyone else--also show an increasingly familiar pattern.

“They get their first Visa or MasterCard in their sophomore year and they really don’t know what kind of salary they will eventually make,” Payne said. “Maybe they don’t even know what they want to do when they get out of college. So, they graduate and they may have $27,000 worth of student loans. Between student loans and their credit cards, they’re behind the eight ball from day one.”

Robert Johnson of Purdue University’s Credit Research Center said people have always had trouble managing their money. The advent of the credit card in the early 1960s and its subsequent proliferation have only made the dilemma of personal finances more complex and bewildering.

“Most of these young consumers have received absolutely no education on personal financial planning either in junior high or high school,” said Johnson, a senior research associate. “They are taught how to drive a car, but not how to finance one.”

Financial Alternatives was recently contracted by McDonald’s to counsel some of the hamburger chain’s young employees. And, as part of a nationwide program, the Los Angeles office of Consumer Credit Counseling Services has begun lecturing in public schools to teach students about responsible credit card use.

“The bulk of the people who come to our office are already in over their heads,” Pittman said. “We want to get to them before it gets to that point.”

Some people blame the schools.

“It’s a major failure of our education system that we don’t prepare young consumers,” Johnson said.

Some people blame parents.

“Parents just don’t let their children know what it’s like in the real world,” Tobias said.

Some people blame the credit card companies.

“Every company wants to give you a card,” Payne said. “They send cards out and they are aware of all the cards that the people already have.”

But none of the young people interviewed for this story found fault in anyone but themselves.

“You just have to learn to control the temptation,” Ferrari said.

Perhaps the plastic experience hit Romo hardest. Her lesson, she said, has gone way beyond simple rules of spending and saving.

“The fact that I filed bankruptcy has a lot to do with how I’m feeling now,” she said. “I feel very guilty. It’s not something I’m proud of.”

Romo still goes shopping. And she still has an American Express card that she pays off every month. But now she pauses to think before each purchase.

“Am I buying this because I need it or just because I want it?” she said. “I’ve learned there are other things that are more important in life than materialistic things.”

Some Golden Rules for New Consumers

Credit counselors offer these suggestions:

* Start with one or two credit cards from department stores, such as May Co. or Nordstrom, before applying for a major card such as Visa or MasterCard.

* Monthly credit-card bills should never exceed 20% of monthly income.

* Comparison shop--never make a major purchase on the first day you look.

* Put some money in a savings account each month--and leave it there.