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Credit Cards 101: Helping Students Manage Easy Plastic

With 64 percent of students holding credit cards, heavy debt is a concern

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Before they ever set foot on campus, college freshmen have typically received dozens of offers for credit cards, giving a whole new meaning to the term "college credit."

The pressure doesn't let up once they've settled into the dorm, says University of Connecticut junior Jeremy Radachowsky. "Very often credit-card companies have booths or tables set up around campus with boxes of T-shirts, candy, prizes, anything they think college students want."

No job, no credit record, no experience with credit? No matter, say credit-card issuers. If you're a full-time college student, it's as easy as filling out a form and waiting for the preapproved card to arrive in the mail. While major credit-card companies have targeted students for at least 15 years, the marketing has become increasingly aggressive during the past five years.

Indeed, students who can't slap down a major credit card to pay for dinner or books are the exception, not the rule. "According to the Roper College Track Financial Services Study, 64 percent of college students have a credit card," says Norma Tharp of the nonprofit Consumer Credit Counseling Service (CCCS) in Atlanta. "That's up five percentage points from 1995." Many have more than one - a big mistake according to consumer experts, who say that the more cards a student has, the easier it is to fall deeply into debt.

Although he signed up for Discover and Visa cards based on the gifts that came with them and because they didn't charge an annual fee, Jeremy says he rarely uses his cards. "I just keep them handy in case of emergencies. Cash is more convenient."

Cash is cheaper

Paying cash is also cheaper than carrying a balance on a credit card, points out Ruth Susswein, executive director of Bankcard Holders of America, a consumer education group. "It's important for kids to keep in mind that a credit card, when the balance is not paid, is a loan, and it's often a very expensive loan.''

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