Living a middle class life built in part on credit card debt, a local immigrant family has the will -- but lacks the way -- to dig out.

12:28 PM EST on Sunday, January 9, 2005

BY LYNN ARDITI
Journal Staff Writer

This is the first in an occasional series of stories that will examine the economic, social and personal challenges faced by Rhode Island's new middle class.

Silvia Reyes follows temptation toward oceanfront property in Westerly.

Journal photo / Gretchen Ertl

Debt has stretched Silvia and Isaias Reyes to the breaking point. Still, one cold afternoon in November they drove from Pawtucket to Westerly to look at a time-share apartment that they couldn't afford.

On this chilly November afternoon, the view from the passenger seat of her husband's 2004 Toyota Sienna LE minivan is of shuttered motels and boarded bathhouses. Silvia turns down the volume on the Latino music playing over the radio and studies the flier she had tucked between the front seats.

"Congratulations Mr. and Mrs. Reyes," it states, "you have been chosen to receive a fabulous New England Escape package." The promotion promises free restaurant and shopping coupons. All they have to do is listen to a sales pitch.

"How many weeks do you have of vacation?" she asks her husband, Isaias. "Two? Three?"

"Two."

The Reyes (pronounced Ray-es) family cannot afford even one week at the beach.

Immigrants from Guatemala, they are riding America's current of upward mobility. But debt always threatens to pull them under.

Silvia tries to reassure her husband. "I just want to see the place," she says.

They both know she wants more. Silvia is 36 and works the night shift at a bank call center.

She left Guatemala City with her mother in 1980. They were part of a two-decade wave of migration during which Rhode Island's Hispanic population quadrupled, to more than 100,000.

Silvia had grown up on fried tortillas and del rosario prayers, but in America, her adolescent cravings were fed by Taco Bell and Madonna. Nothing she had learned at her all-girls Catholic school in Guatemala City prepared her for the new social pressures she faced in the inner-city schools of Pawtucket.

At age 17, she had a baby and a job working nights at a Central Falls braiding factory, loading yarn onto spools. Life unraveled. She dropped out of school, married, divorced, and wound up broke and discouraged; a single mother on the state's welfare rolls.

Now, after years of buying groceries with food stamps and grinding out low wages in factories, Silvia contemplates career options and real estate prices. She and her husband, Isaias, own a house in Pawtucket, a minivan and an SUV.

They have ascended into the ranks of America's middle class. And, like so many middle-class Americans, they've fallen deeply into debt.

Silvia carries a wallet full of plastic. She can barely make the minimum payments on her credit cards.

ON THE DRIVE to Westerly, Silvia insists this trip is not about spending money. This is the week of her 36th birthday. Why not drive to the beach?

Isaias suspects a trap. Someone wants to get his money, money he doesn't have.

Isaias is wary of strangers offering deals. As a young man, he came to America and worked construction, drove a secondhand truck and ate lunch out of a paper bag. He didn't have a bank account; he carried cash.

Isaias worries about the future. Silvia lives for today.

But Isaias can be persuaded. Just a few days earlier, he had handed his credit card to a door-to-door salesman to buy a $1,000 vacuum.

Isaias drives in silence.

More than an hour passes, and still they have not arrived.

Silvia reads the signs along the highway. Her mood sours.

The shopping malls which she knows so well are gone. So are the gas stations where she feeds her lottery-ticket dreams. Even the highway looks unfamiliar.

"We're lost," she says.

SILVIA AND ISAIAS Reyes drive the way they live. Silvia goes in one direction, Isaias in another. Each blames the other for losing the way.

Silvia has lived in America for 24 years, but she still refers to Guatemala as "my country."

Yet, America is her country. Hispanic immigrants from the Dominican Republic, Colombia, Mexico and Guatemala, among other countries, now make up nearly 14 percent of the U.S. population.

And as Hispanics' disposable income rises -- it jumped 29 percent from 2001 to 2003 -- marketers are pouncing on people such as Silvia and Isaias Reyes with Spanish-language TV ads and mass mailings.

The Reyes are easy prey. Generous by nature, they have always shared what they had with family and friends. If a sick relative in Guatemala needs money, everyone in the family chips in.

When Isaias met Silvia, she was a single mother on welfare. He would give her $50 a week to help pay her rent.

"He was so different" from other men, she says softly. "He came from a Christian family. He doesn't swear. He doesn't go out. He doesn't drink."

They moved in together, and, in 1997, she gave birth to her second son, Joseph. Two years later, another son, Danny, would be born and, two years after that, Tony.

In 1998, a letter arrived from the state welfare office. The government wanted to help Silvia get back to work. Silvia didn't know much about the new welfare-to-work movement, but she had always been good with numbers and someday she wanted to start her own business.

New England's biggest bank was looking for people to fill entry-level jobs at its new call center in Lincoln. Silvia landed a spot in a six-week, state-financed program to train Fleet Bank employees. At the end of the six weeks, Fleet hired Silvia to work in customer service. The job paid about $9 an hour.

She became a poster girl for the welfare-to-work program. She and five coworkers flew on Fleet's corporate plane to Washington to shake hands with President Clinton. It was Silvia's first flight. She wore a navy blue suit she'd bought at Macy's for $200.

Two years later, a job opened up in the bank's telesales department, and she applied. It paid $10 an hour, plus extra if she worked holidays. Isaias became a truck driver for a milk company. It paid union wages plus benefits.

Their lives more settled, Silvia and Isaias married in 2001.

One day, Silvia drove by a new three-bedroom house for sale in Pawtucket. She had always wanted to own her own home. As a girl in Guatemala City, she had pored over glossy magazines with photographs of American houses. They looked like mansions.

The three-bedroom in Pawtucket was $125,000. Silvia had to have it.

The couple barely had enough to cover the $4,000 in closing costs, but the bank offered them a 30-year mortgage. And not just any mortgage.

It was zero down.

THEY BOUGHT the house. Then they bought a leather sectional sofa. They bought a glass dining room table with black lacquer chairs. The mirrored china cabinet added luster, so they bought that, too. The kitchen had no appliances, so they chose the Kenmore stove and refrigerator in black and chrome.

They paid for all of it with credit cards.

Silvia worried about driving an old car with her three boys. Her first car was a clunker, barely worth the $3,000 Isaias had given her to get it back from the creditors who had repossessed it. So she leased a black 2002 Ford Explorer.

She wanted her boys to feel good about themselves. She remembered how, as a teenager, her American friends all wore Levis; Silvia had to settle for $8 blue jeans pulled from discount store bins.

"It was embarrassed," she recalls, "living like that in the United States."

Journal photo / Gretchen Ertl

Silvia Reyes plays in her Jacuzzi with her three sons. She and her husband also have a 2004 Toyota Sienna LE minivan, a $1,000 vacuum cleaner and a balance on their credit cards that exceeds their annual income.

So she dressed her boys in OshKosh outfits and Nike sneakers.

The new house had only one bathroom. Silvia wanted a bath big enough so she could bathe all three boys at once, so she decided to buy a Jacuzzi. The marble tiles alone cost her $2,000.

They converted their garage into a bedroom for Silvia's oldest son, and built a playroom for the three boys.

Isaias refused to help pay for the renovations; he thought they were too expensive. But the bank where Silvia works was offering employees low-interest personal loans. She had no trouble getting approved for a $50,000 home equity credit line.

Her boys treat the Jacuzzi like their private swimming pool. Silvia never complains that she has only been alone in it once. In her mind, it's enough to gaze at the gleaming fiberglass pool through the open bathroom door, as she stands, exhausted, doing laundry at 1 a.m. Someday, she says, she'd like to buy a toilet and a vanity in black porcelain, to match the tile.

SILVIA MISSED a payment on one of her credit cards. Then she missed two. So the credit card company jacked up her rates.

She tried to stay one step ahead of her debts. When one company hiked her interest rate, she'd transfer the balance to another card with a lower rate.

And there were always other credit cards. The offers piled up. She had so many credit cards she could barely keep count. Was it eight? Or ten?

She couldn't bear the stress. In 2002, she sought counseling. The therapist told Silvia that she and Isaias needed to come up with a plan to get out of debt. He suggested couples counseling. Isaias agreed to go only once.

They never went back. Isaias had made up his mind. He would pay their $850 monthly mortgage. Silvia would be responsible for everything else.

In 2003, the family earned $66,395, better than the median family income in Rhode Island of $49,000. The average American household at the end of 2003 had 12 credit cards and roughly $7,000 in credit card debt. By September, the Reyes family had nine credit cards on which it owed nearly $60,000.

All but one of those credit cards belonged to Silvia. Her job paid $12.83 per hour, but she worked only part-time. To get approved for the $50,000 home equity loan to renovate her basement, she had agreed to let her employer garnish $300 from her wages each month.

The monthly lease payments on her Ford Explorer alone came to $569.42. It took her two weekly paychecks just to make her car payments.

She used to pay for groceries with food stamps; now, she paid with credit cards.

Her ideas about money were shaped on the job. Every day, customers called the bank's toll-free line looking for loans.

"I see that in America," she says, "the more they have, the more they spend."

Sometimes she lay awake at night worrying about how she would pay her bills. And what if she or Isaias lost their jobs? Would they have to declare bankruptcy? Would they lose the house?

Isaias "thinks I have a problem," she says.

Silvia wished he would take charge of their money, put her on an allowance. But he says that she created the problem; she has to solve it.

They both work hard to make their monthly payments. Their goal, they agree, is to get out of debt.

"I'm going to stop going to the mall," Silvia says, resolutely.

One day last September, the bank gave Silvia a $10,000 personal loan. The interest rate was under 12 percent, well below the rate on most credit cards. Silvia logged onto her computer at work that night and used the loan to pay off four of her credit cards. She would change her spending habits. This was a first step.

"I can't wait to get rid of all my credit cards," she said after work, relaxing on her living room sofa in front of the TV. "I learned my lesson."

THE MINIVAN slows in front of a low gray building with a sign out front that reads "Atlantic Beach Casino Resort."

The place looks deserted. Hookups for trailers stick up from the blacktop, as if the tide had gone out and taken everything with it. The salty air blows in gusts off the water, stinging the tops of ears.

Inside, Silvia and Isaias Reyes wait awkwardly at the front counter. She stands barely 5 feet, with mocha skin and long, highlighted hair; Isaias is tall and muscular, with jet black hair, dark eyes and a distant stare.

The resort office looks as though it sprang up overnight and might be packed up at a moment's notice, without a trace. Since the promotional letter that brought them here was long on description but short on specifics, Silvia and Isaias do not know what, precisely, they have come to see.

"Hi," says a tanned saleswoman with spiky blond hair. "Any promotions you've been promised you'll get at the end of the tour. This is about time-share . . . . I just want you to keep an open mind."

Journal photo / Gretchen Ertl

Silvia Reyes shops for clothing in Attleboro. She remembers as a teenager having to wear $8 jeans. She says she was embarrassed "living like that in the United States.''

The saleswoman leads them across a gravel path as she shares a story about a failed family vacation that made her a devotee of the time-share.

Silvia and Isaias climb the steps of a deck that overlooks the churning ocean. A door flings open. They step into a neatly tiled two-bedroom condo with light oak furniture trimmed in pink and green.

Silvia beams. She rushes for the kitchen, pulling open the cabinets to reveal full sets of dishes.

"It includes everything!" she says. "Wow!"

"This model has just one bathroom," the saleswoman says, "but it has a Jacuzzi tub."

Silvia investigates the master bedroom, and the second bedroom with bunk beds where the kids would sleep. Isaias is silent. He keeps his hands tight inside his jacket pockets.

The saleswoman directs the couple to the kitchen table for part two of the pitch.

"There's a very strong trade factor," the saleswoman says, leaning across the table. "These condos go for anywhere from $2,000 to $3,500 a week. You can rent it, loan it, bank it for next year."

The saleswoman skips over some of the basics: that timeshares are sold by units of time, usually by the week; that developers can sell the same unit as many as 52 times, or once for each week of the year.

Nor does she explain, up front, that the initial price is not all the buyer pays: there are annual maintenance fees, and fees for trading units or dates.

"And what do you think is going to happen to oceanfront property?"

The question is delivered like a quiz, and Silvia, in a barely audible voice, replies on cue.

"Going up?"

"Yes!"

"Basically," the saleswoman says, "it's about a commitment to a vacation."

Finally, the question: "Is this something, if it were affordable, would it interest you?"

Isaias says nothing. But his right leg pumps like a jackhammer pounding cement. He stares down at the table, fingering a sales sheet covered in a protective plastic sleeve. It reads: "Sell -- At Any time to Anyone."

Silvia speaks to Isaias in Spanish.

The saleswoman prattles on about "green weeks" and "red weeks" and "trading."

Isaias doesn't take his eyes off the table. He sighs and wipes a hand over his face.

"If we don't use it in the summertime," Silvia asks, "can we still use the facilities?"

Yes, the saleswoman says, as long as you pay $40 for a sticker and park at the town beach down the road.

"See," Silvia says to Isaias, "even in March, if we decide to go to Guatemala, it would be great!"

"How old are your kids?" the saleswoman asks. ". . . Oh, they would love the beach!"

The saleswoman runs down the numbers. Down payment. Enrollment fees. Finance charges. Rental unit charges. Maintenance fees. In one scenario, the down payment would be $719, plus a monthly charge of $82.

"I don't think it's expensive at all," Silvia says. "How long would it take to pay for something like this?"

Out comes the price list. Two-bedroom flats in green start at $8,000; red ones at $14,000. Summer weeks in red: $42,500.

They offer financing, the saleswoman says. The interest rate is 16 percent.

Do they want to talk it over?

Silvia had thought that maybe she could convince Isaias. But he says he's not buying. He will keep her from temptation -- this time.

The saleswoman presses on.

"We really don't care what your financial situation is," she says. ". . . Some people put it on their credit cards."

Lynn Arditi, a Journal staff writer, can be reached at (401) 277-7335 or by e-mail at larditi [at] projo.com