University of Wisconsin - Extension

If you have college-age children, you probably talked about their classes and the importance of getting good grades. But did you talk about how to use a credit card?

A report released this summer found that the majority of college students have at least one credit card in their name and many carry a monthly balance on the account, says Linda Boelter, Certified Financial Planner and family financial management specialist for the University of Wisconsin-Extension.

"If your teen didn't leave home with a credit card, he or she will likely be overwhelmed by credit card offers when arriving on campus," Boelter adds.

The major credit card companies see college students as good future long-term customers and they aggressively target their marketing toward students with free t-shirts, school supplies, magazine subscriptions, coupons and other special offers.

Having a credit card does offer some advantages--convenience, access to ATMs, ability to shop on-line. But if not used responsibility, it can lead to financial problems.

According to the College Board, the average undergraduate with student loans graduated owing $19,400 in 1998-99.

"Add credit card debt to those student loans, plus the expenses that come with starting a new job--renting an apartment, buying a car--and you create a substantial financial burden."

Parents can help their teens learn responsible use of a credit card by sharing these suggestions:

-- One credit card is enough. Limiting the line of credit is a good idea to reduce the temptation to charge more than you can afford.

-- Pay your bills promptly. The quickest way to damage your credit history is not making timely payments to creditors.

-- Try to pay off the balance in full each month. If that is not possible, make the largest payment you can and try to pay off the balance as quickly as possible.

-- Record all transactions so you know how much your bill will be at the end of the month. Keep all your charge slips and reconcile them with your statement.

-- Don't let anyone borrow your credit card--not even your best friend. You are responsible for all the charges on your card.

-- Create a realistic spending plan to balance your income and expenses to help control spending.

Ideally, parents talk to their teens and even younger children about responsible use of credit and other money management skills while they still live at home.

For more ideas about raising money-smart children and other financial management information, contact your http://www1.uwex.edu/ces/">county UW-Extension office.