Financial planners say parents and students need come up with a budget for credit card spending while in college.
Four out of 5 college students amass more than $900 a year in credit card debt, according to Cathy Dewitt Dunn, a financial planner.
"If you have a $10,000 limit on a credit card you should only use 30 percent of that in short term debt. That lets the credit card companies understand you know how to live within a budget, you're not maxing out your credit card on a monthly basis," said Dunn.
Parents should talk to the students about credit cards early on, make sure their children know not to use money they don't have and use resources available to keep them on the right path.
"Go ahead and sign up for overdraft alerts. The fact that we have these smartphones, there’s so many ways you can really help save yourself a lot of money by just signing up for some online apps," said Dunn.
Some financial advisors say having an emergency savings that equals how much you make in six months should be your first priority before paying off anything extra.
