13 tips on using your credit card

If you're heading off to college, you're probably going to be deluged with credit card offers. Sound good? It's great if you know how to use them. But if you don't, credit can make school -- and your life after -- a lot more difficult.

The average senior graduates with about $3,000 in credit card debt, according to recent data from student loan provider Nellie Mae. Even before graduation, almost a quarter of undergraduates carry a balance of more than $3,000.

"Credit cards are a wonderful device, but they exist to make money for somebody -- and that's not you," says Fred Brock, author of "Live Well on Less Than You Think: The New York Times Guide to Achieving Your Financial Freedom" and a journalism professor at Kansas State University. Modern life requires credit, he notes, "but boy, do you need to be careful. You're playing with fire."

Using your credit card?
Here are 13 tips to raise your game and keep you out of financial jail:
13 tips on using your credit card
1.Before you leave home, talk with your parents.
2.Don't get a card for the promotional prizes.
3.Shop around.
4.Know the rules of your card.
5.Have your own rules for using the card.
6.Protect your credit rating.
7.Read the credit card statement as soon as it comes.
8.Use a card, pay the balance.
9.Forgo cash advances.
10.Know that card companies exchange information.
11.Don't just make minimum payments.
12.Be prepared to stand up for yourself once in a while.
13.Look out for those warning signals of too much debt.

1. Before you leave home, talk with your parents. Chances are, they've had credit cards for years. They'll know a few things about how they work and how quickly those balances can creep up. Work out a budget so you know what you have to live on. What do you do in an emergency? If something happens and you need an airline ticket home, a visit to the dentist or a part for the car, is there a bank account you tap? Or is that when you use a credit card? And if so, who pays the bill?

If they do hand you a card "for emergencies," what does that mean to them?

2. Don't get a card for the promotional prizes. "There are schools that prohibit credit card solicitation on campus," says Marjorie Savage, author of "You're on Your Own (But I'm Here If You Need Me)." But some campuses allow it and "there are credit card companies that turn it into a circus," using promotional items such as sunglasses to lure students. "And students fall for it," she says.

Students think "I won't use (the card), but I'll get it anyway," she says. It's a lot cheaper to put aside a couple of bucks and buy those sunglasses or alarm clock.

3. Shop around. If applying for a credit card is part of your financial plan, use multiple offers to your advantage. You only need one card, so compare:

Shop around:

"I'm one who thinks you should be really leery of deals on credit cards," says Brock. "You don't want frequent flier miles or bonus deals." Instead, look for a card with fairly simple rules, a reputation for treating customers well, a low interest rate, and the amount of credit you need.

-- Updated: July 27, 2006

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