It’s just a little piece of plastic, but if misused, it can cause broke college students a lot of trouble.

Senior advertising major Jason Craig is dealing with the trouble credit cards can cause. He got his first card three years ago and is now working to pay off his debt.

“I had one card, and I recently got (two more) because the other one was maxed out,” Craig says.

When he received his first card, Craig says he didn’t have any problems, but he soon became caught up in its allure.

“At first it was no big deal,” he says. “But when you don’t know how to use a credit card, you get sucked in.”

While credit cards can help build a financial reputation and are useful to have during emergencies, the number of college students with credit cards has increased — and so has their debt.

Todd Romer, executive director of Young Money, and Scott Bilker, creator of DebtSmart.com, offer their advice for preventing and managing credit card debt.

Before swiping your card, remember:

• It is important to pay off your balance each month. Always keep track of your account totals, especially before making major purchases.

• Don’t rely on your credit card for every $2 or $3 purchase. Those small purchases are easy to forget about and quickly add up.

• When you’re broke, don’t buy anything. Treat your credit card like it’s cash because for you, it is.

In debt: Now what?

• If in debt, first call your credit card company and ask if you can change your terms. If that doesn’t work, try to find a credit counselor to help educate you on the fine points of managing your money.

• Get financially organized with old statements, receipts and balances. Negotiate with your bank to try to get lower rates.

• You always have leverage when you have debt because the bank is making money off your financial penalties, Bilker says. Threaten to transfer your balance, and they will try to keep you.

– Brittany Moseley

CREDIT USAGE AMONG COLLEGE STUDENTS

As students progress through school, credit card usage swells. In 2004, 91 percent of final-year students had a credit card, compared to 42 percent of freshmen. Fifty-six percent of final-year students carried four or more cards. Final-year students carried an average balance of $2,864, while freshmen carried an average balance of $1,585.

The average outstanding balance on undergraduate credit cards in 2004 was $2,169, a 7 percent reduction from 2001 when the average balance was $2,327.

Students from the Northeast had the lowest outstanding average balances, while students from the Midwest had the highest balances in 2004.

Seventy-six percent of undergraduates in 2004 began the school year with credit cards.

Undergraduates reported direct-mail solicitation as the primary source for selecting a credit card vendor in 2004.

Source: Nellie Mae