The Red and Black

Issue date: 8/7/08 Section: Athenscape

MELANIE McNEELY

Check quickly: How many credit cards are crammed into your wallet right now?

We students tend to have more than is necessary. Offers are everywhere - a discount here, a discount there, all when you fill out a credit card application.

I've even gotten an amazon.com Visa card to save $30 on a book order.

Credit cards are a great way to build credit for future investments - if you pay your bills promptly. But having too much plastic in your wallet can be dangerous.

For one thing, having too many credit cards can actually damage your credit score. If you're worried about your credit rating, making utility, rent and car payments on time also builds your credit, and you have to do those things anyway.

With so much buying power on hand, it's easy to spend more than we have. It's fun to buy new clothes, eat out with friends and buy drinks downtown.

But be wary of the easy trap of going into debt unnecessarily.

Plenty of students are putting themselves through college, and if you are one, of course I am not talking to you. Or there could be circumstances in which taking on debt may aid in future money-making power.

For example, maybe, like me, you opt to take an unpaid internship for the summer with a 30-mile commute. We all know how pricey gas is right now. But if the experience is important enough for your future, it may be worthwhile to go in debt for a short time.

But for those lucky enough to have the support of our parents, we should take advantage of the opportunity to have a clean credit slate on graduation day.

With the economy and job market in terrible shape, frivolous spending should be kept to a minimum.

I'm all for credit cards. I've used them plenty of times when I needed to buy groceries and gas a few days before payday. But I've also used them when I saw that cute dress at the store I couldn't go without.

If your income is limited, it's best to strictly limit unnecessary purchases until your income can support your lifestyle.

The key, though, is to be able to pay off your debt quickly so it doesn't accumulate during your time in school.

None of us wants to have to dig ourselves out of a debtor's hole as soon as we land that coveted entry-level job. Many of us will have to pay back student loans, so keeping other debt down is paramount to future financial success.

Now ask yourself what Capital One always wants to know: What's in your wallet?

- Melanie McNeely is design editor for The Red & Black.

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