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Fewer college students are carrying credit cards

MOORHEAD, Minn. -- Regan Whitney is in no way plastic shy. With one credit and two debit cards, Whitney, a junior at Concordia College, feels she is a bit more financially literate than many of her peers.

Whitney, who is studying marketing, knows the value of establishing credit. She's had her credit card since high school and has never missed a payment.

While she knows how to responsibly use a credit card, she would like to see her peers take some initiative with their finances.

"Students need to stop thinking what they should do with their money, and actually make a change," she said.

While college students are often thought of as being deeply saddled with debt, the percentage of students with credit cards is down.

A recent Sallie Mae study found only 35 percent of undergraduates owned a credit card in 2012, down from 42 percent in 2010.

The decrease comes in the years after a 2009 federal law tightened regulations on fees and rates and put limits on issuing cards to people under the age of 21.

While students without cards do not have to pay off credit card debt in addition to student loans, not having a credit history can pose problems as they become adults and need credit to buy a car or get a mortgage.

Kristina Kaupa is a junior at Concordia College who has opted not to have a credit card. She owns two debit cards instead, unsure if she would know how to properly use a credit card.

"They're both a piece of plastic, but it's a completely different game," she said. "In all honesty, it kind of freaks me out to have all that so readily accessible."

She finds it difficult during the school year to be involved on campus and work a job at the same time. Without being able to earn money to pay her balances, she fears she would likely go into debt.

In contrast to Kaupa, Concordia senior Laura de Rosier owns two debit and two credit cards.

De Rosier signed up for her first debit and credit cards in high school, and signed up for a second debit card after her bank told her it would be a good idea to use different cards for different purposes.

De Rosier admits that she may not use her cards as responsibly as she should. She uses her credit cards when her income is lower in a particular month. She has a small rolling balance each month that is rarely paid off completely.

On average, students with credit cards owe $755, according to the study. One-third carry zero balances, and only 3 percent owe more than $4,000.

Although no credit is better than bad credit, Ryan Eberle of The Village's Financial Resource Center in Fargo said it is important to start building credit as soon as possible.

Without good credit, banks will be more hesitant to lend money.

"Good credit is going to look much better to banks and lenders," Eberle said.

While making student loan payments on time does help build credit, Eberle suggests students also sign up for a credit card to use for small purchases that are paid off each month.