College students are graduating with more than a diploma these days, they have accumulated on average over $3,000 of credit card debt.

This is not debt because of tuition or books, but debt due to the late night pizza runs, the concerts, the clothes and the CDs.

And this is usually debt they have not told their parents about. According to Nellie Mae, a national student loan financing corporation, 83 present of undergraduates hold at least one credit card and 21% maintain a balance of between $3,000 and $7,000. Add that to the average school loan debt of $20,000 and you have a kid who is on the brink of disaster.

Pre-approved credit cards no longer start with college; highschool students and some junior highschool students are getting pre-approved credit card applications in the mail and really getting the hard sell via e-mail. They are offered free gifts (tee shirts and beer mugs) for filling out the applications. And they succumb, 20 % of 18 year olds hold four or more credit cards.

The Federal government’s Jump$tart survey of over 4,000 high school seniors revealed that 32% used credit cards and 43% had access to ATM machines.

According to Teenage Research Unlimited, a teen marketing research firm: More students drop out of college due to debt than for academic reasons. 

So just like the SEX lecture you need to sit your kids down and talk to them about CREDIT.

Here are some of the basics to cover:

· Credit is not “free” money and it must be paid back.
· Credit cost money; the credit companies make money by charging the retailer a fee to participate, they charge you a fee for your card and they charge you interest if the card is not paid in full every month.
· Pay off the credit card bill in full each month. Paying only the minimum can drag payments out for many many years. So buy only what you can afford to pay for that month.
· A bad credit report will follow you everywhere. A potential landlord or employer as well as lenders have access to your credit report. Poor credit can mess up renting a place or getting a new job as well as costing you a higher car insurance rate.
· Pay your bills on time, within the grace period. Late fees are expensive, average $39. Being late on one bill can affect the interest you pay on your other credit cards
· To establish a credit history, one doesn’t need four cards, one will do.
· Understand your credit score and check your credit history. www.myfico.com has lots of good information along with www.bankrate.com. You can get a free credit history annually at www.annualcreditreport.com
· Debit cards may be a good training card for teens; they can only spend what’s in the account and no more!

Pay Jr is an elaborate allowance system transferring money as soon as parents sign off on the website that chores are done.