“If you open a rewards card with us today, you can save 15% off of your purchase and receive valuable coupons every month in the mail,” quickly says a sales clerk at the counter. 

Sound familiar?  With the onslaught of credit cards offering discounts, low approval ratings, and rewards, it’s hard to pass up what sounds like a great deal.  Every day, credit card companies trap college students into applying for credit cards with high interest rates that may run them into financial debt.  Be smart and avoid running into problems with the following tips. 

Build your credit.

Most college students have yet to accumulate much credit.  Everybody needs good credit in the long run, helping to buy a first house, first car, and other smart big ticket investments.  Acquiring a credit card can help build a college student’s credit score, but only if the card is paid off in the time period allotted by the card company.  If the balance is not paid off, it accumulates interest, which can be a bad move for a struggling student.  Bottom line, pay at least the minimum balance on time, but preferably in full, and good credit will accrue. 

One card is probably enough.

There is no reason to get a card at a department store every time the sales person offers a discount.  In the long run, the largest percentage off a purchase will probably be that first time the card was applied for and used, so its benefits are most likely not worth getting the card in the first place. 

In addition, steer clear of credit card offers through the mail.  Credit card companies target college students because they need money and are vulnerable and inexperienced enough to apply for a card that appears to have a low interest rate.  The fine print, however, will probably say that the interest rate will raise within a few months of being approved for the card.  One credit card is enough to build adequate credit, and manageable enough to pay off every month. 

What’s a good card for college students?

Try going to a personal bank, because they often are more willing to approve a college student without prior credit if the student already has a savings or checking account there.  Also, many card companies and banks have credit cards specifically for college students.  Even though these cards might have higher interest rates, they are more likely to approve a student who does not have any credit and will probably offer a longer grace period (the window of time in which a person has to pay off his balance). 

Citibank offers some good student friendly cards with dividend rewards that offer a limited amount of cash back on necessities like groceries, gasoline, etc.  The Federal Reserve Board offers some valuable information on how to find the best card at their website (http://www.federalreserve.gov/Pubs/shop/). 

I’m already in debt.  What should I do?

A misconception when dealing with credit card debt is to cancel a card.  This, in fact, will actually lower credit scores, so the best thing to do, if the card is a temptation, is to cut up the credit card and to slowly pay off the balance.  Many people in debt mistakenly believe that filing for bankruptcy sounds like a good deal because all debts will be exonerated and the government will, essentially, forgive the person of all debts and have the slate wiped clean.  However, those who file for bankruptcy will have the bankruptcy on their record for at least ten years after, preventing them from starting their lives over as they had thought. 

Acquiring a home will be one of the most difficult tasks for them in the future, because a bank or other loaner will be less willing to give out a loan they do not think the person will be able to pay back.  Essentially, they will not be willing to invest in a person if they do not think they will get their money back.  The best thing to do is see how much is owed to the credit card companies and start with the card with the biggest interest rate and pay that off first.  Often, if a debtor calls the credit company, he or she can negotiate lower interest rates or possible reduce the amount of money owed.   

There is no science to dealing with credit cards.  Simply be smart, build credit with one or two cards, and pay balances off in full.