Attention Freshman: The New Freshman 15 – Credit Card Debt

There are many warnings out there about the legendary Freshman 15. Most common are the Cosmo features warning high school girls to take heed and avoid the fast food denizens of temptation that lurk on ever corner of the college campus. More recently are the headlines geared to incoming freshman about a different but ultimately weighty Freshman 15 — Credit Card Debt.

The process will begin, not with the siren song of the Taco Bell chihuahua or with the golden welcome of McDonalds’ arches, but with one of the very first initiation rites that you will attend on campus. When you see the crowd of eager students and pamphlets lining the streets like a ticker tape parade you may think that you’ve stumbled upon your first student rally. But then you’ll notice the mugs and tee-shirts, all emblazoned with the name of A Very Big Financial Institution. Then, a smiling representative will offer you an application, and if you fill it out you will find, to your surprise, that a credit card will arrive in the mail just a few weeks later — even though your on campus job is paying you just under 10 an hour and you have no credit history whatsoever.

Your parents aren’t exaggerating when they talk about the onus of the Freshman 15. It may seem unfathomable when you are drinking your paid-for-in-plastic frappuccino, but interest rates, careless usage and missed payments aggrandize into what for some students can be formidable debt. The Freshman 15 starts at 15,000, balloons to 25,000, and, for a good friend of mine whom we’ll call O. Twist., a walloping 68,000. And I don’t think poor O. even drank frappucinos.

Most of the advice is oversimplified though and abruptly stops after inspiring visions of despair and years of indentured servitude to pay off irresponsible spending. Yes, if handled without care credit cards are every bit the peril that your parents and advisors would have you believe. But credit cards can be also serve as powerful tools for building a credit history for those who use them responsibly. Credit card companies give away plastic to college students so readily because they assume that mom and dad will foot the bill if you can’t make the payments yourself. But after graduating from college and securing your first real-paying job, your odds of getting a credit card actually drop dramatically.

You’ll need good credit history for other stuff that you’ll want sooner or later in life– a mortgage, a car, a loan – and the longer your credit history the better. As a rule of thumb in avoiding debt and building a strong credit history, only put on plastic what you can pay off immediately, and if you don’t have the cash, don’t charge it or you may end up as our unfortunate O. Twist did, with interest payments that can build up to hundreds and even thousands of dollars a year.

So, if you can manage a card responsibly then consider filling out an application now rather than later — and don’t forget your free mug and tee-shirt.