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College students are perhaps the least trusted debtors in the credit community. Teenagers would be worse, but at least they still have their parents watching their expenses like overgrown birds of prey. Student loans and credit cards are extremely important tools that allow students and their families to deal with the growing costs of higher education. The following five pointers might help shorten the decades it can take to pay off mismanaged college debt.

**The credit card company is not your friend.**

The free Chevy Chase Bank Frisbee and the PNC Bank tennis visor really don’t make it worth signing up for both cards. Credit card companies, in a genuine effort to help students spend as much as they possibly can, target incoming freshmen from the minute they step on campus, and over 42 percent of freshmen sign up soon after they wave goodbye to Mom and Dad. The companies don’t stop there, though, expanding their market share throughout a student’s undergraduate years, with over 88 percent of seniors carrying a credit card by the time they graduate, and over 62 percent of those students carrying four or more cards. The credit card companies don’t care how many cards you hold as long as you have a healthy balance on their card. So don’t get tricked by the trinkets – one is more than enough in pretty much every circumstance.

**You need credit for everything, so don’t ruin it in college.**

Again, once your parents cut off the lifeline, you’re going to have to join the rest of the world, which, unfortunately, involves things like renting your own apartment and leasing your own car. Having a good credit score allows you to get what you want more quickly and more easily, and generally allows you to enter into financial agreements at a better price (as creditors will find you more trustworthy). You can ruin your credit score quickly, and each month you carry a balance on your card, the further your score sinks. So if you have any outstanding debt, pay it off immediately and cut up your card with a big pair of scissors.

**If you can’t be responsible, just use a debit card.**

If you know you’re the kind of person who just isn’t going to make payments or won’t even look at your statements once you know you’re carrying a balance, don’t bother with a credit card at all. You can always get your first one when you have a steady stream of income so that you can make your payments on time. With a debit card, once the money’s gone, it’s gone, and the overdraft fees ensure that you get a sharp penalty every time you go over your limit. Credit card companies generally love students because they carry low-limit cards and almost always carry a balance. So don’t be a victim of corporate marketing; just get a debit card instead.

**Feeling good about making the minimum payments is a terrible mindset.**

The whole concept of a “minimum payment” is the credit card company’s attempt to make you hold a balance for as long as possible at the company’s desired risk tolerance. Making your minimum payment shows credit card companies that you are the perfect sucker, and they love you because your default risk is very low. In addition, making minimum payments on time sounds like a positive step, but in reality, the longer you carry that outstanding balance, the further your score drops. A 2004 Nellie Mae study shows that the average balance on a student credit card is over $2,000, and only 21 percent of students pay off their balance each month. That’s a lot of dropping credit scores, so don’t let yourself be a part of the crowd.

**Keep your parents involved; it’s better for you and for them.**

You may fear telling your parents that you have a several-thousand-dollar balance on your credit card, but it’s one of the fastest ways to solve your problems. Telling your parents may mean that you can’t frequent M Street quite as often, but it will be a huge benefit to you, as your parents will be far more forgiving than the credit card company will be. If you put the problem off until you have $10,000 in outstanding debt, you’re going to have to tell them anyway, and it will be much uglier. So give up the open tab at Rhino Bar and make a call to Dad when he’s in a good mood.

If you are responsible and keep track of your finances, your college years are a great time to build up your credit score. Use the card only for certain things, like groceries and school supplies, and link it to your bank account so that it automatically makes withdrawals and sends you an e-mail so that you know the amount. Students as a demographic are notoriously foolish about their debt, but if you follow the steps listed above, you can be on your way to leaving college with a perfect credit score and a lot of financial options.

Charlie Leisure is a senior in the College and chief executive officer of Georgetown Collegiate Investors LLC. Max Gaby is a senior in the McDonough School of Business and chief operating officer of Georgetown Collegiate Investors LLC. They can be reached at leisurethehoya.com and gabythehoya.com. Money Talks appears every other Tuesday.

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