College students get "F" on credit management

August 31, 2009 A Sallie Mae study reveals college seniors carry an average credit card debt of $4100 compared to $2900 five years ago. And college freshmen tripled the amount of debt on their credit cards, going from $373 to $939.

An irregular payment history on even a small debt can damage your credit file long-term plus, keep in mind lenders, employers, and landlords review credit reports.

So to minimize your risk of ending up in the red but still build up your credit history become an authorized user on your parents' card.

"So their parents can then monitor the way they're using credit and talk to them about how they're spending their money, what they're spending money on and the impact of having to repay all the things they spent money on," said Alethia Calbeck of Consumer Credit Counseling Service.

Another option is to get a secured credit card. You put down a cash collateral deposit and that becomes your line of credit.

"The thing to be careful of secured cards, though, is they tend to have higher interest rates and higher fees so you need to be cognizant of that and pick a card that makes sense for you."

Also, track your spending, pay off your credit card bill in full every month, leave your card at home if you've spent more than your budget allows and use your card to automatically pay off one of your monthly bills like your wireless bill.

"In lieu of paying the cell phone company directly, you pay your card off and by doing that, you show a consistent payment history over time and you show that you're able to manage and use credit wisely."

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