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The United States is a nation of consumers. Plain and simple. The difference between now and sixty years ago is that much of that consumption is financed not by the consumers themselves but by their promise to repay. From credit cards on the low end to home and business financing at the upper echelon of most credit histories, the lives of nearly every American is peppered with credit consumption. Credit is a very powerful weapon, almost necessary, for future purchases, but the blade is double edged. Is it then wise to arm students with credit cards just as they are beginning their adult lives?

In my own case having turned eighteen at the dawn of a new century and having been raised in one of the most prosperous economic decades in the nation's majestic history, I did not understand the ticking time bomb I had knowingly slid into my wallet. The staggering amount of time needed to repay even the most modest indulgence was completely lost on me. Oblivious to the scale of financial disaster I was fomenting, I continued to consume with ignorant abandon.

Student credit cards have notoriously high interest rates and stiff penalties for late payments. It is extremely easy for anyone without a firm grasp on the situation to quickly find themselves in over their heads as documented in the film "Maxed Out." My personal saga is no different as I found myself intimately familiar with the negative aspects of credit cards. Yet, to this day, I will not say credit cards are intrinsically bad.

The story did not have to unfold thusly. In my current financial stability I can only look back on the younger me with a sense of pity. For my pitfalls could have been avoided in their entirety through a little education, a little budgeting and a little appreciation for the future.

Used properly, credit cards can be a wonderful tool to build the credit history that will someday secure the low interest home loan used as the foundation of the family nest egg. Just how does one go about paving the road to prosperity with plastic?

Setting up a pragmatic, realistic budget is the first step to any sound personal financial policy. After accounting for every dollar that comes in and every dollar slated to go out students can then use their credit cards for nearly all of their purchases - and have the ability to pay off that balance in full each and every month. Paying off a balance on time and in full each month is a wonderful way to use credit cards to build up a financial portfolio and establish habits that show the student to be a good borrower.

If students truly would like to establish their financial future, there is no easier way to do so than through prudent use of their credit cards. To do so responsibly requires students to do more than just spend however. As illustrated above, it forces the student to take stock of their financial picture and develop a useful budget. In this sense the credit card is able to serve not as a catalyst for financial ruin but as the trigger to a rounded, complete and savvy borrower.

Credit is without question an extremely powerful phenomena. Ultimately, the question of credit's value is answered solely by the end user. Credit is a double edged blade that can be harnessed to one's benefit as easily as it can be turned against the user. The power contained within the plastic is static; it is the user who determines how dynamically to use it. As the power of the atom can be unleashed in a terrible instant, credit can destroy a young person's life, yet used properly and with care, credit can be the most powerful tool a young person has to set up a sound financial future. Choose wisely.

Learn more about this author, James Griffin.
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