Q:  My child will be attending college next year and she insists that she should have her own credit card.  She claims that all of her friends either already have a card or will be getting their own soon.  I understand there are arguments for and against allowing a student to have their own credit card.  Can you help me sort it out?

A:  Every fall, thousands of eager students head off to their first year of college, where they will experience the many rituals of collegiate life: trying to figure out what classes to take, trying to figure out what parties to attend, adjusting to dorm life, meeting new friends, going to football games and, oh yes, getting their first credit card.

According to Consolidated Credit Counseling Services, Inc. (CCCS), 80 percent of colleges and universities permit some form of on-campus credit card solicitation, and nearly 80 percent of full-time undergraduate students have credit cards. (A student can sign up without a co-signer if they are over 18 years old.) Despite the fact that students have little income or credit history, such solicitation is not surprising. Roughly three in four students keep the first credit card they receive for 15 years or longer.

The downside to this solicitation is that the average outstanding balance is $2,226, according to CCCS. Nellie Mae, a nonprofit student loan provider, says that ten percent of college students have rung up outstanding balances over $7,000. Students have been forced to drop out of school because of debt problems brought on by the misuse of credit cards.

Credit cards can have their place in a college student's life. They can be useful for emergencies, help the student learn about the proper use of credit and establish a credit history (if the card is in their name). To help your child make the most appropriate use of credit cards during their school years-and later-here are some tips.

• Educate them about credit cards. According to CCCS, only 44 percent of students understand the word "budget," only 34 percent understand the concept of buying on credit and a meager 8 percent understand compound interest. And like many adults, they don't grasp the often-expensive issues of grace periods, late payments, finance charges and minimum payments. Students also need to learn about the importance of building and keeping a good credit history-it affects their ability to get future loans and even their ability to get a job.
   

• Have a spending plan. Keeping a budget for the school year can help your student think more carefully before spending, and better understand how a credit card fits in the picture.
   

• Keep only one card. Even if the credit limit for a newly issued card to a student is only $500, a student with a handful of cards can run up a lot of debt in a hurry. Credit limits tend to climb depending on age and the student's credit history, so the student might be smart to ask for a low credit limit initially and keep it there.
   

• Watch the teaser rates. Select a card based on its full rate, not a teaser rate. Some recent cards for college students offered rates at around 8 percent, but jumped to 16 to 17 percent within a few months. Also look for cards with low or no annual fees, and reasonable late-payment, grace period and billing policies.
   

• Practice. Consider having your child start out using your credit card so you can keep tabs on the charges and discuss inappropriate charges. Only after they show responsibility should they get their own card. Another way is to start them out with a debit card, which deducts charges from their checking account, or a secured card, which allows them to only charge up to what they have deposited in the card's account.
   

• Don't co-sign their card. When it's time for your student to get a card on their own, don't co-sign the card. As the primary borrower, they can run up charges without you being able to control their use of the card, yet you'll be legally responsible to pay for the debt, late fees and so on if they get in over their heads. In short, you could harm your own credit rating.
   

• Keep it paid off or pay more than the minimum . This is good advice for any credit-card user, but especially for low-income students whom can ill afford to get behind. If they keep their purchases small or only for emergencies, they'll probably be okay. Also be sure they understand the high cost of paying only the minimum payment, which runs up interest charges over time.

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