Be smart with your first credit card

Your card is not a toy

Misuse your plastic and you could pay the price for years. Some things in particular you'll want to avoid:

• Taking cash advances. Your card is not your bank account. Cash advances come with high interest rates that apply immediately (there's no interest-free grace period, as there is with purchases when you pay your balance in full every month). Find a cheaper source of cash.

• Paying late. You'll trigger a late fee ($30 to $40, typically) and possibly a higher interest rate. Worse, if you skip a payment entirely, you'll trash those credit scores you've been trying to build. A single skipped payment can knock 100 points off your scores, and the damage can linger for years.

• Getting anywhere close to your limit. The less you charge, the better, but your scores will really take a hit if you let your charges creep above 80% of your limit.

• Paying the minimum. This is such a bad idea it needs its own section. Read on.

Pay your balance in full -- always

Your first statement will show you how much you've charged by the statement closing date as well as something called a minimum payment, which is typically 2% to 3% of your total balance.

If you want to wreck your life, pay only the minimum due each month.

Seriously, carrying a balance is an awful, expensive habit, and it leads a lot of folks into financial hell. When you pay the minimum, you're setting yourself up for years of debt and total payments that pretty much double the cost of whatever you've purchased.

If you pay only a 2.5% minimum on a $2,000 balance at 15% interest, for example, you'll be paying off that debt for about 15 years at a total interest cost of $1,758. You don't have to be a finance major to know those numbers suck.

So pay in full, even if it means eating ramen noodles the rest of the month. And if you don't have the cash to pay the bill, don't make the charges.

One easy way to make sure you can pay it off: Every time you charge something, move an equivalent amount of money from your checking to your savings account. Right before the bill is due, move the money back into checking to cover the payment.

Get online access and sign up for alerts

Because you shouldn't charge more than 30% of your limit or spend more than you can pay off, you need to keep track of your balance. Always. Fortunately, that's pretty easy.

Once you have online access, you can monitor your account and set up text or e-mail alerts that can:

• Give you a running balance.

• Alert you when payments are due.

• Provide a heads-up when you've charged more than a certain amount.

• Warn you of suspicious transactions.

Get in the habit of checking your balance before charging anything. It takes just a minute or so to call or sign on.

Set up automatic payments

College life is busy. It's easy to forget basic things, like showering, and anything more complicated than that can get lost in the shuffle.

Arrange with your credit card company to have your total balance debited from your checking account each month (or, at the very least, your minimum payment -- you can go online and make an additional payment each month to pay off the bill). Then make a note on your calendar a few days before each due date to remind you to make sure there's enough money in your account to cover the payment.

Video: Build credit on campus

In other words, set yourself up for success. As with most other aspects of college life, a little research and planning can pay big dividends. You can graduate free of credit card debt but with high enough credit scores to ease your way to adult life. It's worth the effort.

Liz Pulliam Weston is the Web's most-read personal-finance writer. She is the author of several books, most recently "Your Credit Score: Your Money & What's at Stake." Weston’s award-winning columns appear every Monday and Thursday, exclusively on MSN Money. She also answers reader questions on the Your Money message board.

Updated Sept. 25, 2009

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