Credit Cards Can Leave College Students in Debt and Ruin Credit, Experts Say

In a Sept. 19 press release, CareOne Credit Counseling Services says the best time for college freshmen to learn effective money management skills is before they fall prey to credit card offers and end up with burdensome debt that carries on even after graduation.

Bankrate.com says that as soon as college freshmen step foot on campus, they can expect a deluge of credit card offers. Although most of them will have limited credit lines and high interest rates, they will be very easy to get - regardless of the student's income.

CareOne says that Nellie Mae Corp., located in Braintree, Mass., conducted a study of college student credit card debt and found that almost 10 percent of undergraduates have credit card debt in excess of $7,000.

Established in 1982, Nellie Mae provides education financing for undergraduate and graduate students and provides loan pre-approval, a loan information center and debt management education and assistance.

A spokesperson for CareOne says that as students begin their college days, that's "the perfect opportunity for college freshmen to learn effective money management skills that can be used far past graduation in four years."

Bankrate.com asserts that when credit cards are used responsibly, they can help a student establish a respectable credit history. "The best reference you'll find on a credit report is a major credit card paid on time, all the time," says Gerri Detweiler, an education adviser who wrote a financial brochure for students and parents. But Bankrate.com also warns that credit cards can "leave financial bruises that don't heal until long after the diploma has yellowed on the wall." Too often students learn about the high cost of credit cards after they've charged too much and the finance charges start adding up.

Preferring that college students not have credit cards at all, CareOne offers several suggestions to help college freshmen avoid graduating from college with debts beyond what they may have borrowed to attend school.