Recent federal laws made it far more difficult than it had been in the past for those under the age of 21 to obtain a credit card in their own name , and now experts are warning college students about the dangers that having their own card can pose.
Financial experts caution that young adults who don't have a lengthy credit history in their own name may run into serious problems when they open a credit card if they're not careful about how they manage such an account, according to a report from the University of South Carolina student newspaper the Daily Gamecock. Because many students are already carrying tens of thousands of dollars in student loan debt, having credit card debt can stretch budgets too thin.
"When you don’t manage it effectively, a credit card can drastically damage your consumer credit," Catherine Sale, financial literacy coordinator at USC, told the newspaper. "I have seen students come into the [office] with five, six thousand dollars in debt and needing a way out."
Carrying large amounts of debt and missing payments can have a profound impact on a consumer's credit standing. For this reason, it's important that consumers check their credit reports regularly.