As the media buzzes with consumer debt alarms, you may think credit cards rank second only to beer bongs among the perils facing your scrubby undergrad. But review the research, and it turns out that a collegian's first card isn't the menace that doomsayers claim. Students' average balances are at their lowest since 1998, and most use plastic to pay expenses you've probably got covered, such as school supplies, textbooks and tuition. "A lot of people are working and charging their way through community colleges," says Tamara Draut, author of a report on youth and bankruptcy for the public policy group Demos.

 

WHAT'S THE REAL DANGER?

On-campus marketing. Many students believe the cards they sign up for at the student union are somehow endorsed by their school, says researcher Jill Norvilitis. She found that students who received their credit cards through on-campus solicitations had higher debt-to-income ratios than those who got them from mailed offers or elsewhere. A true affinity card, which kicks a percentage of purchases back to the school -- and which the school has, in fact, screened -- is a safer bet. Such arrangements are on the rise around the country. Also on the rise are college-sponsored financial planning courses, a trend Norvilitis, a professor of psychology at Buffalo State College in New York, applauds. "Students who know less about money in general -- not just credit cards but savings, checking, social security, all of that -- those students are more likely to be in debt," she says. 

 

WHAT'S THE BEST DEAL?

There's not much wiggle room on APRs for student cards, currently averaging 15-18%. Two exceptions are Sovereign Bank's Preferred Student card (9.9%) and American Express' Blue for Students (13.74%). For the most up-to-date and comprehensive rate chart, see the "Compare Rates" section at www.BankRate.com. If your undergrad's attention span allows room for just one warning, focus on the dangers of a cut-rate initial APR. Since such cards convert to higher rates at the first missed payment, they're a bad bet for a novice user.