In my first year of college, I got a MasterCard. There were a lot of good reasons to take on a little credit-card debt, or so I thought—my job at Barnes & Noble didn't pay enough to live on, and I figured I could pay back the balance as soon as I was making a little more money. Maybe when I was out of school and making a decent salary as, um, a journalist. Also, I figured that because the maximum balance was low (around $2,000) I would never go into so much debt that I couldn't pay it back. And everybody needs to build up credit, right?

But having a credit card felt like having free money. Pretty soon I was using it to pay for all sorts of things—furniture, clothes, eating out, gifts. Instead of budgeting, I charged; and within a few months the company raised my credit limit. To make an extremely long story short, I got into debt that I couldn't pay back (or haven't yet, anyway) and it's cost me a lot of things I would have liked to have. Frankly, even if you think you're good with money, a credit card can still trap you into thinking you can spend more than you earn (or talk your parents into giving you) and that just isn't true. Eventually, you have to pay all that money back—plus interest. And with interest rates as high as 29 percent (the rate may start low, but it jumps the second you miss a single payment), you'll be blowing a huge portion of your monthly payment on interest alone. (If you take on $5,000 in debt at 29 percent annual interest, it works out to $120 a month in interest alone.)

Here are some more statistics to think about before you fill out that application. The average undergraduate, as of 2003, left school with $18,900 in debt, up 66 percent from 1998, according to Nellie Mae. Between starting school and graduating, the average student doubles her debt and triples her number of credit cards. By the time college students reach their senior year, 78 percent of students have credit cards. The average student has a balance of around $2,500, and about 10 percent owe more than $7,000.

So what can you do? The first thing is, if you're going to get a card, make sure it has a low credit limit—no higher than $500 or $1,000. Then set this limit as a maximum with the credit-card company, which will ensure that your limit won't increase automatically. Try to find a card with the lowest interest rate possible, no fees, and a 25-day grace period for late payments (fees add up quickly). Work out a monthly budget, writing down what you spend (on bills, going out, everything else) and compare it to what you need to spend. Debt advisers recommend keeping your monthly debt at no more than 10 percent of your monthly income.

Finally, don't pay for school expenses with credit cards. Students who use cards to help pay for books and tuition end up with far more debt when they graduate. Student loans are a much better deal than credit-card debt, and you don't have to start paying them back until after you're out of school. Credit-card debt is a lifelong burden, and trust me, you don't want it.