College Credit Card Debt - The Best Way Out is to Never Get In

July 17, 5:08 PMDC Personal Finance ExaminerChristina Cobb

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Before I went off to college years ago, my mother gave me one piece of financial caution: Do not under any circumstances get a credit card. Needless to say, the first thing I did was get a credit card (despite the fact that I had no need to have one whatsoever.) Now, years later, I can't remember exactly what I used the card for, but I'm quite confident that I paid for my purchases two and three times over by the time I was through with the interest.

A Word to the Wise

I realize every college kid isn't like I was so I'm not going to tell you not to get a credit card. My family was quite supportive financially while I was in school (I wasn't even allowed to have a job my freshman year). Your financial situation could be different. If you're putting yourself through school and earning low-income, credit cards may be helping make ends meet. No matter what your case though, here's your warning - be very careful. College is the time when a lot of young adults mess up their credit, which is sad when you consider that the financial decisions you make as a young adult have lasting implications. If you're looking for how to handle your credit card responsibly, the article below from CNNMoney may be a good starting point.

[College] Kids' credit cards | CNNMoney | July 16, 2009 | By Gerri Willis

NEW YORK (CNNMoney.com) -- College students are pulling out the plastic now more than ever. The average credit card balance is over $1,600. Here is what your college student needs to know before stepping foot on campus this fall. 

1. Credit card debt

Student credit card debt is a big problem. According Sallie Mae, 30% of students put tuition costs on their credit cards. And only about 17% pay off their balance regularly.

And consider this: students, on average, have almost five credit cards to their name. Bottom line here is that college students should be building credit when they're in college -- and credit cards is a good way to do that. But building good credit card habits is crucial for young people.

2. New legislation

New CARD legislation will take effect in February. One big change we'll see is that adults who are 21 or younger must get a cosigner if they want a credit card. And, credit card issuers will be required to move off their marketing off-campus.

Some experts speculate that this may cause marketers to hit up the local bar or to set up on off-campus events. Of course, that doesn't take place until February -- so this fall semester you can be sure credit card issuers will be hard at work trying to get students to sign up.

3. Know what to look for

Check out student-specific cards -- Look for a card that gives you an interest rate of 17-18% with no annual fees. And don't apply for a rewards card or cash back card unless you are sure you can pay off the balance in full each month.

Here are some of the best rated cards from cardratings.com: Citi ForwardSM Card, Chase +1 Student MasterCard, and Discover Student Card.

You don't want to use credit cards for things like tuition, rent or groceries.

Try to use that card only in emergencies, like to book a flight home or to pay for an unexpected car bill.

Make sure you strive to pay off that bill every month. You really don't want to keep a revolving balance on a credit card -- especially if you don't have a steady source of income. 

-- CNN's Jen Haley contributed to this article.