If you are college student, there’s a good chance you are in debt with a credit card. Don’t worry, though: by the time you graduate, it will be worse. In fact, the longer you stay in college, the better the chances of digging your financial hole deeper.

In the 2005 Report on credit card usage among college students, Nellie Mae shows that 42% of college freshmen own a credit card, while a stunning 91% have one by the time they graduate. What’s worse is that first year students carry an average of $1,585 debt while final year students are $2,864 in the red.

It wasn’t always this way, though. Before the late 1980’s, student credit card usage was almost unheard of. In fact, you’d be crazy to mention the idea. With no credit history and lack of financial preparedness, who would ever loan money to this demographic?

But it actually turned out to be a great idea for the credit card companies. Their direct mail and other promotional campaigns—“instant approval” offers and low APR—have effectively made credit card debt the norm among college students. And it’s looking like student credit cards are here to stay.

Fortunately, indebtedness is slightly decreasing. This could be a sign that more students are getting better at managing their finances. Understanding essential credit card features such as APR, penalties and other finance charges can help in the process of applying for and owning a credit card. Knowing how to use a credit card—and not get used by it—is now just another part of the college survival kit.

Written by:
William Sherman