Incoming college freshmen face lessons in handling credit, staying out of debt

If you are under 21, to open a credit card account you will need to either show you have the income to make payments or get a cosigner 21 or older who has the ability to do so.

Credit card companies are prohibited from marketing credit within 1,000 feet of a college campus. This limit would include related college events. Companies are also banned from offering certain “tangible’’ gifts.

But I wonder how successful the Credit CARD Act will be. There will be locations near a campus that will give credit marketers a chance to pitch to students. The companies may not be able to offer a free T-shirt or stuffed animal, but they can entice students with discounts, reward points, or promotional credit terms, according to final rules released by the Federal Reserve.

And I’m sure there are plenty of parents who are convinced that their kid needs to establish credit. So they will be all too willing to cosign. By the way, the Federal Reserve says that anyone 21 or older can cosign. This means it’s possible that older siblings or even friends may be persuaded to cosign. But no one should ever do this.

You are equally responsible for the debt. Unless you are prepared to treat any charges as your own, don’t cosign.

I have long advocated that students who are not employed full time shouldn’t have credit cards. It’s possible for them to get through college using just cash and a debit card.

Yes, I know many kids are financially responsible and can handle credit. However, using credit only teaches you to be a debtor. I know all too well the consequences of putting a credit card — with little or no supervision — in the hands of a financially naive young person. I hear their horror stories long after the pizza, clothing, or spring break charges. With credit, they learn how easy it is to live above their means.

But since I know I’m swimming against the tide, at least be sure if you’re determined to cosign for a student that he or she has a good understanding of how to use credit as wisely as possible.

To help you with this conversation, creditcards.com has posted information about the section of the CARD Act pertaining to students. You will also find on the site a contract for parents and adult children created by John E. Whitcomb, author of “Capitate Your Kids.’’

The contract calls for parents to show the child how to pay off the card every month by regularly reviewing the bill. The son or daughter agrees, among other things, to stick to a spending limit, and that purchases or services should be paid off by the next billing cycle. If the bill is not paid in full, the credit card will be canceled immediately.

Michelle Singletary is a columnist for The Washington Post. She can be reached at singletarym@washpost.com.