I'm growing up: My first collections letter

For the past few years, I have prided myself on my money smarts. While I struggle with impulsive shopping tendencies, I have never experienced major debt. I have dodged identity theft and I've never missed a payment. Or so I thought.

I became a Gold's Gym member about two years ago. When I signed up, I put the monthly charge on my student credit card because as a recent college graduate with only that one card, I wanted to build credit. My checking and saving accounts are with the same bank, so I'd just pay it off when I saw a balance on the card upon logging in for check other balances.

Not long ago, I received a new card in the mail; without asking, the bank converted the student card to a regular card, though with the same atrocious APR. I was reminded to update the card information with merchants, but almost all my recurring charges go on my newer credit card and debit card. I must have forgotten to update my card number with the gym, because last week I opened my mail to find a letter from the Gold's Gym International Collections Department. Apparently, I'm not the only CreditCards.com blogger to receive a surprise encounter with a debt collector this week.

"Our records show over the past two weeks we have attempted to contact you by telephone to request you visit your local gym to resolve an issue with your method of payment," it said. "Our recent attempts to draft your account have been unsuccessful. We simply need additional information, or new information to continue to process payments."

I love this part: "We again encourage you to visit your local gym as soon as possible and recommit to positively changing your life." Sounds optional, right? Nope. "And while you're there, please take a moment to resolve this matter and return your account to current status." In other words, take care of this or you'll be hearing from us again.

The letter said I owned them $60.71. I was unsure why they hadn't been able to get in touch with me, but then I realized that when I changed my cell phone number at least six months ago, and it didn't occur to me to give my new number to my gym. Why would I? I had never received a call from them before.

The letter came with blanks at the bottom to fill in my new card or checking account information and an envelope for me to mail it back in, but I knew I couldn't go to sleep that night with this unresolved! I immediately called the number on the letter, but I had missed their business hours. I called my local gym location instead and spoke to a nice man who was able to input my new card information, new phone number and take my payment for the charge.

It was over as quickly as it started and I was so relieved. It's pretty horrifying to receive a letter with the words "collections department" on it, but it was easier to deal with than I thought since it was a mix-up. I feel fortunate that they sent me a letter after only two weeks of trying to reach me and that the damage was only $60. I am unsure at this point if my credit will be affected, but I hope I cleared it up fast enough that it won't hurt me.

This did teach me a few important lessons:

1. Make a list of all the recurring payments you have for each credit card. This way, when your card expires or is canceled, you know exactly which merchants you need to contact.
2. When you change your phone number, notify everybody; not just friends and family! Think of all businesses where you have a membership or monthly bill and be sure they have your current phone number. Consider giving them an alternate number, as well.
3. Be sure to update the businesses with your new address if your card is charged automatically or you do paperless billing. I am just glad I didn't move apartments and forget to give the gym my new address, too; then I really would have had the collectors after me!
4. Deal with collection issues as soon as possible. Because I called immediately, when the balance was small and I could easily explain the mistake, they were very understanding and took care of it right away. Had I put it off, it could have really affected my credit adversely.