College students and credit cards: a potentially hazardous combination, considering that college-age young adults are usually first-time users of credit.

And whether students currently have a credit card, or are planning on applying for one in the future, it's important to be smart about it in this unstable economy.

It's the current state of the economy is that's partly the reason for people not being smart about purchasing with credit, according to Jeff Neace, personal finance professor at UD and managing partner of Neace Financial Group. During the recent past boom of the stock market and lower interest rates, people felt wealthier, built bigger homes and rapidly borrowed money to fill their homes with new possessions.

"Americans got used to spending other people's money to live a lifestyle they couldn't afford," Neace said.

Banks are feeling the pinch. Dayton Daily News' recent article "Ohio's Largest Banks Struggle in 4Q" describes the financial crisis Fifth-Third Bank and Key Bank are facing as they report "major fourth quarter losses." As a result, these struggling banks are fearful of higher defaults on loans and credit cards.

This has a big impact on college students looking to get a credit card and establish credit. The open and easy credit that was readily available for college students in the past does not currently exist, according to Neace.

Amy Kline, branch manager of the campus credit union Day-Air, agreed.

"I think students will find it more of a challenge," she said. "Places that used to give anybody a credit card have tightened up."

There are ways to smartly approach credit. Students who will be graduating soon with a job will probably be able to get a small credit limit on a Visa or MasterCard, Neace said. It's important to avoid frivolous spending and use it as a "convenience tool rather

than a borrowing tool."

"Students need to buy things they need as opposed to what they want," Neace said. "It's back to the basics."

Matt Ferriss, a senior entrepreneurship and marketing major, currently has two credit cards that he uses "moderately." He said it is a priority for him to pay it off every month, a key way to be a responsible credit user, though there are times when he has fallen short. Ferriss also said the current state of the economy has curbed his spending.

"The economy has made me more aware of what I buy," he said. "I now try to put my discretionary spending to better use."

Younger students may not be as likely to have started establishing credit yet. Sophomore Courtney Heinekamp is taking the advice that Neace and Kline encourage.

"I'm not going to get a credit card until I am sure I can pay it off every month," she said.

When students like Heinekamp are ready, Kline said it is essential that they understand the account agreement they are signing. This includes the terms, billing cycle and interest rate. She also said students should establish a good relationship with a financial institution like a credit union, who can teach how to properly use and understand credit.

"Don't be afraid to ask questions," Kline said. "Hold off on signing if answers are not available for you."

Students are welcome to visit the on-campus Day-Air, connected to Marianist Hall, for more information on any agreement from a financial institution before signing, Kline said.