Money College: Seven ways to avoid credit card blunders

Perhaps no area of life affects undergraduate students more than credit. In this article, Money College writer Peter Sachs offers seven essential tips; please check out Money College's Katie Drews' insights into credit and college here.

What better way to take advantage of your new-found financial independence in college than to sign up for a credit card ... or two? The feeling of having spending power in your pocket -- even if you're barely making any money -- is thrilling at first. But financial experts warn there are some big drawbacks to having a credit card as a college student. New laws are changing parameters such as minimum payments and the difficulty of getting a card in the first place. But they won't protect you if have bad spending habits. Here are some of the biggest pitfalls, and how you can avoid them.

1) If you're trying to get a credit card for the first time, new laws have made it much harder. Your best bet is to try to sign up for a basic card at the same bank where you have a checking or savings account. Even then, you may need a parent or older adult to be a cosigner on the account -- meaning that if you forget to pay your bill, they are held responsible for the balance. Expect a low credit limit, often less than $500 at first, and no free pizza or water bottles for signing up.

2) Your credit score matters, but many college students don't realize it. Every time you apply for a card, even if your application gets rejected, your credit score will drop 5-10 points. Go on a spree trying to get every store charge card you can, just for the 15% discount each time, and you could find your score 50 points lower in a matter of months, even if you pay your balances on time. That could hurt when it comes time to rent an apartment, get affordable car insurance -- or apply for your dream job.

"A lot of employers check credit reports before they hire you," youth financial expert Peter Bielagus told WalletPop in a phone interview. "So if you have a lot of debt and you have a late payment here and a late payment there, certain companies aren't going to want to hire you."