Student credit cards are very lucrative for creditors and are often viewed as relationship builders. Creditors are hoping that the relationship you establish while in college will be expanded when you land full time employment.

Student credit cards are available, seemingly, at every turn. Students can apply on campus at tables loaded down with incentives that invite students to apply for disaster (interest rates and/or late fees can make that t-shirt or Frisbee very expensive in the long run). There is also the avalanche of offers that arrive in the daily mail for consideration. It can be very easy to sign on the dotted line with no more than a passing thought to your financial future.

If you decide that you are ready for a student credit card, limit your selection to one card. Pay the balance in full each month, if possible. If that is not possible, always pay more than the minimum and above all, pay on time. Late payments jeopardize your credit rating and may even result in default rates (which are significantly higher than regular interest rates).

Parents should be aware of the credit choices their students are making. Very often, if students do not handle credit responsibly, parents feel obliged to bail them out. This can be a hardship for parents and may even give students the wrong message. It is important for parents to be proactive and talk with students early on about responsibilities and expectations around credit management.

If you want your student to have access to money for emergencies but feel uneasy about the prospect of bailing your student out if problems arise, consider:

•  a credit limit of only a few hundred dollars

•  a debit, rather than credit card (it does not build a credit history, but it does minimize credit problems if your student is not ready)

•  monitoring the credit card account online or with duplicate billing (you can keep an eye on expenses/payments and head off any problems

There are many advantages to student credit cards (buyer protection, online purchase ability) but they must be weighed against credit readiness. If you want a credit card for emergencies, but succumb to impulse buying, you will not have funds available when an emergency arises. If an honest assessment reveals that you are not ready, hold off a year of two until you are. The time you wait may mean the difference between sleepless nights and endless calls from bill collectors or owning a home with a great interest rate and lower monthly payments than you could get with damaged credit.