Budgeting 101:

Your Money Guide For Getting Through School

Today's Lesson: Plastic

10 steps for students who want to handle credit wisely

The risks are higher than ever if a student racks up lots of card debt. More employers and landlords are checking the credit reports of job candidates, so the cleaner the credit, the better.

Here are the experts' 10 steps for handling it wisely.

• Always remember that credit is a loan.It's real money that you must repay. Before you apply for the first card, decide what the card will be used for -- Emergencies only? School supplies? -- and determine how the monthly bills will be paid.
• Go slowly. Get one card with a low limit and use it responsibly before you even consider getting another.
• Shop around for the best deal.
• Study your card agreement closely, and always read the fine print flyers enclosed with every bill. Credit card offers vary substantially, and the issuer usually can change the terms at will with 15 days notice.
• Try to pay off your total balance each month. Just paying the minimum is a trap: If you pay off a $1,000 debt on an 18 percent card by just sending in the minimum each month, it will take more than 12 years to repay.
• Always pay on time. A single slip-up will place a black mark on your credit record -- and likely will cause your issuer to jack up your interest rate to the maximum.
• Set a budget, follow it faithfully and watch how much you're paying on credit. A good rule of thumb is to keep your debt payments less than 10 percent of your net income after taxes. So if you take home $750 a month, spend no more than $75 a month on credit.
• Keep in touch with your issuer by notifying the company promptly when you move. In the event you must be late on a payment, call them before it's late. They want your business for life, so they may be willing to make alternate payment arrangements that won't leave a mark on your credit rating.
• Close accounts you aren't using. Having available-but-unused credit counts against you when it comes time to buy a car. That's because lenders don't like it when you have the ability to go deep into debt quickly.
• At the first sign of credit danger, such as using one card to pay off another, make the card harder to use. Only carry it when you plan to use it, lock it up in an inaccessible place or entrust it to your parents.