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:
What’s the annual percentage rate, or APR? You should be offered a decent rate if you’ve never had problems with credit before. “Anything more than 2 or 3 points above prime is, in my opinion, outrageous,” says Brock.
How long will that APR last? “If anyone tells you they are giving you a permanent interest rate, walk away,” says Brock. “There is no such thing.”
What’s the penalty fee for a late payment, and what’s considered late? Some companies mark you late if it arrives the day it’s due but after a certain time of day.
What’s the penalty rate? You could get your rate hiked after just one late payment. So how high could it go?

“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

4. Know the rules of your card. Most cards have some pretty intricate rules that they require users to follow. Violate one and you could end up paying penalty fees, having your rate raised and damaging your credit record, which would increase the costs if you ever need to borrow money. This means you have to read all that fine print that comes with the card.

From time to time, credit card companies will change the rules. They could raise the rate, switch what day your payment is due, etc. You’ll get a notice in the mail. “They send out these little tissue-thin booklets with agate type,” says Brock. “When those things come in the mail, it’s almost always some bad news. Your job is to find the bad news.”

5. Have your own rules for using the card. The dumbest way to run up a bill? A long series of little things you don’t even remember buying. “You should not be charging movie tickets, you should not be charging lunches on a credit card,” says Brock.

Decide ahead of time what the card is for and how you’ll pay it off when you do use it.

6. Protect your credit rating. There’s another reason to be careful with your card. How you treat it can have a big impact on your quality of life.

Now that you have a credit card, you’ll have a credit report. This is a record of your personal information and how you’re handling your finances. If you make any mistakes, they stay on your record for years.

There are three credit reporting agencies: Equifax, Experian and TransUnion. Card companies will usually report to one, two or all three. This is also where financial institutions will go for information when you apply for a loan. A bad rating means you either will be denied loans or will have to pay higher interest rates. Many times, prospective employers and landlords will also check your credit report to see if you’re responsible with money.

7. Read the credit card statement as soon as it comes.

What to look for:
Are all the charges yours?
Is the interest rate the same?
Have you incurred any fees?
What’s the balance?
Is the balance going up or down?

8. Use a card, pay the balance. “Students shouldn’t charge more than they can afford to pay off at the end of the month,” says Ken Paulsen, author of “Living the College Life” and adjunct professor of journalism at New York University. His advice: Evaluate what you need and distinguish that from what you want.

“There’s nothing wrong with wanting something costly,” Paulsen says. “Ask yourself: ‘Can I afford it? How will I pay for it?’ And the answer is not, ‘With my credit card.'”

— Updated: July 27, 2006

9. Forgo cash advances. Cash advances are a great way to get stung because there are too many ways they can go wrong. “Nobody should ever use a credit card to withdraw cash,” says Brock. “There is no grace period. There are almost always fees. The interest rate is usually quite a bit higher. It is a very expensive, inefficient way to get money.”

10. Know that card companies exchange information. If you have more than one credit card account, there’s something you have to know. Make a mistake with one card (late payment, missed payment, etc.), and the other card could raise your rates, too.

11. Don’t just make minimum payments. Avoid the temptation to run a bill now and bank on paying it off later. If your plan is to charge, make the minimum payments while you’re in school, and pay off the balance after graduation, you might want to rethink it. “With minimum payments, you’re playing the game on their home turf,” says Brock. “It’s a joke.”

Even though you will have a salary, you’ll also have to pay all your own bills. “Students often think it doesn’t matter how much debt they run up because they are in college, and they’re going to get a great job and can pay it back,” says Savage. “They don’t realize how painful that will be.”

And by that time, “often the credit card debts can end up being the cost of a car payment,” she says. Plus, years of making only the minimums also won’t do great things for your credit rating.

12. Be prepared to stand up for yourself once in a while. Has a card company hit you with a penalty rate or fee because you slipped up once? If you call right away and are persistent, you could very well talk your way out of it. “I have found that you can be amazingly successful on the phone with credit card companies, especially if you owe them money,” says Brock. “And if it’s only the first time, they will usually waive (the penalty).”

Keep working your way up the food chain, and be polite. If they are threatening a rate increase and won’t back down, let them know you’re willing to switch cards and take your money elsewhere, says Brock. And mean it.

13. Look out for those warning signals of too much debt. Three signs you’ve charged too much: you can’t pay off the balance at the end of the month, the balance is growing or you’re only making minimum payments.

The solution: Stop using the card. Analyze what money you have and whether you can pay it down. And ask for help if you need it.

Dana Dratch is a freelance writer based in Atlanta.

— Updated: July 27, 2006

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