As a parent, you may know that college students are the largest segment of first-time customers for credit card issuers. When used properly, credit can be a tremendous asset. However, when handled improperly, the resulting debt can become a terrible liability.

For example, if a student racks up a $1,000 credit card bill his freshman year, and pays the low minimum payment each month, he will finish his bachelor's degree, complete his master's program, finally begin earning a living and still have three and one-half years to go to pay off that spending spree. In addition, if a student ruins their credit in college, it can affect their chances of obtaining future credit and impact job opportunities as most employers check credit histories before they make an offer of employment.

Here are some quick tips for helping students avoid credit problems:

Spending & Savings Plan. Before seeking any credit, prepare a spending plan, or budget. How much of their monthly income will go toward paying credit card bills? Monthly debt payments should not exceed 20 percent of their monthly take-home pay or monthly allowance.

Investing Time, Too. Counsel them to invest time when shopping for credit and know the options. Look for cards with low interest rates, little or no annual fee, and a reasonable "grace period" to allow "free time" before finance charges begin.

The Credit Shop. Since different types of credit have different interest rates and terms, use the same amount of time and research shopping for credit as you would a new car or other major purchase. Also, consider the risks involved. What would happen if they default on a loan?

Credit Is Like Driving. A Privilege, Not A Right. Counsel your young adult that credit is a privilege, not a right. Once blemished, a good credit record is difficult to rebuild.

Courtesy of Money Management International (www.moneymanagement.org)

When you have more time, here are some other great resources:

Money Management for College Students
1000 Best Smart Money Secrets for Students