By Marcela Cartagena

MISSISSIPPI STATE -- When classes begin, students realize nothing comes cheap -- books, tuition and housing. Credit cards are often used to pay these inevitable expenses, but many students later learn credit cards may not be the best financial option.

According to a CNN 1996 report published on the Internet, most college students are bombarded with nearly 20 credit cards applications each semester. Since most college students have little or no income, many question why credit-card companies target this high-risk group.

"Credit-card companies may feel comfortable knowing students are likely to have a good job in the future," said Dr. Beverly Howell, a family economics and management specialist with Mississippi State University's Extension Service. "Also, sometimes parents will financially help students with their credit card payments."

Howell said there are advantages and disadvantages to the use of credit cards. Some of the benefits of a credit card are protection against cash theft and emergency situations. It can teach money management as students learn to use credit responsibly. One main disadvantage of the use of credit cards is that it can lead to impulsive spending habits.

"College students who carry a credit card can easily spend beyond their means," Howell said. "Some students don't have a clear understanding of how much they owe. Many times they think that paying the minimum payment will take care of the bill, but they don't realize that it takes years to pay off a large balance this way."

Howell said there is a segment of students who use credit cards for essential expenses; however, there is another segment who spend large amounts of money in malls, restaurants and nightclubs.

"Many college students spend or influence their families to spend money on things such as clothes, health and beauty products, and snack or fast foods," Howell said. "The teen market continues to grow as students are the target for manufacturers."

When selecting a credit card, Howell said students should think of their needs and organize a budget that identifies their income and expenses.

The number of credit cards a person should have depends on each individual, but it is often best for students to limit themselves to have one major credit card that it is widely accepted.

Howell said, on average, Mississippi students have four cards. This number varies greatly because there are many students who have none, and there are rare cases of students who have as many as 20 credit cards.

"Many times, young students have not had the financial experience to manage that type of financial responsibility," Howell said. "That's why it is important for credit-card companies to be more conservative and selective when offering credit cards to this consumer."

A good credit history is important. Sometimes a credit history is reviewed by employers, insurance companies, apartment managers and businesses offering credit for items, such as cars or furniture. Good credit is essential in making major purchases in the future.

"The responsibilities of credit begin as soon as the student receives, sign and uses the credit card," Howell said. When obtaining a credit card, follow these rules to avoid theft and a bad credit history:

• Keep the card in a safe place and treat it as cash
• Never give the credit card number to friends or strangers
• Before signing receipts, verify they are accurate
• Destroy all carbon copies
• Keep all receipts to check billing statements for accuracy
• If you lose your credit card, inform the credit card company immediately
• Become familiar with consumer credit laws

Howell said students in serious debt must admit they have a debt problem and address it as soon as possible. The sooner they do this, the greater the options will be. Options for reaching financial freedom include consulting with reputable credit counseling services in the state.

"Debt consolidation can be a smart move to get out of debt," Howell said. "But students should keep in mind that consolidation requires discipline and commitment. If they are not careful with consolidation, their debt problem will magnify."