By Zachary Hansen

Going off to college creates a lot of new freedoms for the average student. With this increased independence also come extra responsibilities that weren’t present before. Among these, managing debt can be one of the most challenging.

While the 2009 CARD Act banned issuing credit cards to anyone under 21, many students still end up with some form of credit card debt before graduation. According to a 2016 Experian study, about 30 percent of grads-to-be had an average balance of $2,573 in credit card debt.

Add student loans to the mix, and it might seem like dealing with debt or building credit might not be worth it, but John Hund, an assistant professor in the Terry College of Business’s Department of Finance at the University of Georgia, disagrees.

“Increasingly, the credit score information is into all sorts of places it initially wasn’t — hiring decisions, anything rental, etc.,” Hund said. “So as you transition into picking a first job or getting your first apartment … you have to have some established credit to begin with.”

Hund recommended students get a card as early as they feel comfortable managing the responsibility. Since some jobs pull credit scores during the hiring process, he said students should start establishing their credit 12-18 months before job hunting.

Bethy Hardeman, the chief consumer advocate at Credit Karma, also recommended students build credit sooner rather than later. She said there were many ways to start building credit using a credit card, such as co-signing with an adult, using a secured credit card or applying for a student-specific credit card.

“A lot of students, who are younger, don’t have a lot of credit history to show, so it’s harder to get approved for a standard credit card,” Hardeman said. “Student credit cards usually take people with lower or no credit scores, usually with a lower credit limit.

She recommended that people who feel comfortable with the responsibility of a credit card get one as soon as they get their first job. That way, there’s verifiable income, which is required by many cards for approval.

For many students, debit cards are the predecessors for credit cards. McKenzie Lamb, a senior UGA student majoring in human development and family sciences, said she doesn’t have a credit card currently, but that her debit card has helped her become more comfortable handling her finances without the risk of debt.

“I (think) I’m more responsible now managing money with my debit card — the money that I spend is the money I have right now,” Lamb said. “So I have to track it and take care of managing what I’m spending and watching what I’m spending and it’s given me experience for when I eventually get a credit card.”

However, debit cards don’t replace the eventual necessity of building a credit score, and according to Hund, it is absolutely a necessity.

“I just think (living without credit) is a non-starter,” Hund said. “You (could) go completely off the grid and just use cash to buy whatever, but that’s an insanely limiting way to live your life.”

Not everyone is ready to handle the responsibility that comes with managing a credit card, but it’s a step most people will want to take well before graduation. Hardeman’s best advice is to research your options in advance, such as interest rates and credit limits, and to have a specific plan on what to use the card for.

“Maybe put all your gas purchases on it or something specific that you can easily control,” Hardeman said. “Then you can have a system of, ‘This is what I have my card for and this is when I pay it off.’”

Most importantly, she said to make sure to pay off as much of your balance as possible each month. She said it’s a common myth that people think they need to carry debt from one month to the next to build credit, but all that does is cost you the interest money.

“Always pay off your full balance whenever you can or at least your statement balance to avoid paying interest rates at all and treat the card more like a tool to build credit rather than access to cash you don’t have,” Hardeman said.