Credit is a dangerous game for the typical college student. You're working part time for low wages, you've got no credit to begin with, you've got college loans looming overhead, and you need a new futon because your drunkard roommate went on a barfing expedition last night. Whoopee! These are the best years of your life!

Students, you have two things going for you: 1) your college loans are interest free right now and 2) you're living in cheap squalor... errr, a dorm.

The trick to establishing credit is never being in debt and never paying interest. In fact, you should make a little extra interest by using a card correctly. Nope, that's not a typo. Here's how.

Who This Article Is Not For
If you're a student and you need to borrow money, this article is not for you. If you need to spend more money than you earn, this article is not for you. If you cannot be disciplined with your money, this article is not for you.

If you fit any of these descriptions, please, do not get a card - and cut up any that you already have.

So Who Is It For Then
I wrote this article for responsible students who want to establish credit. You've got a job and you can make ends meet, and you want to know how to safely and intelligently build credit.

You don't need or want to borrow money. You want to build credit for when you will need it in the future - specifically, for when you buy a home.

Sound familiar? Let's get started.

Open A Savings Account
The first thing you need to do is open a savings account at your bank. You'll be using this account to pay off your card every month (more on that later).

Make sure you open your savings account with at least the minimum balance required for it to not carry a service fee. On top of that, you'll need to build up your account until you can cover the service fee plus whatever you reasonably expect to spend a month on your credit card.

Get A Credit Card From Your Bank
When you get your first card, it will probably have a fairly high interest rate. This is another reason why it's so important to never carry a balance. That interest will run away with your money faster than your roommate can throw down a beer.

Even if you are not approved for a card, you can get what is called a secured credit card. You'll have to pony up collateral equal to the credit limit on the card and you wont see that money for a year. This sucks, but if you go with a low credit limit and you are disciplined, you'll be in really good shape in just a year. At that point, you can trade up to a real card and you'll get that fat check back in the mail.

Make sure to get a card with no annual fee and at least a 30 day grace period. Anything else should be avoided like the plague.

Set Up Auto-pay With Your Bank
When you sign up for your card, set up a monthly auto-payment plan that connects to your savings account.

Every month, your card's balance will be paid off from your savings, and you will never miss a payment. More importantly, the balance will be paid before it builds interest.

People who pay off their cards monthly are commonly referred to by the credit industry as "deadbeats." Here's to being a deadbeat.

Treat Your Credit Card Like a Check Card
Here's the important part. You need to treat your credit card like it's a check card. Only use your card when you have money in your savings to cover your charges. Never spend what you don't have. It's just like balancing a checkbook.

Remember, the plan here is not to 'borrow' money. You are building credit so that you'll have a good credit record in the future when you need it.

Move Your Checking Account To Savings
Savings accounts have horrible rates, but it's better than the big zero that your checking account is pulling in.

The problem with a savings account, however, is that you typically can only withdraw money a few times a month without imposing fines.

But check this out: you can now pay for normal day to day things with your credit card as if you are just withdrawing from your savings account. All of your charges are combined into a single withdrawal at the end of the month. This enables you to make your normal day to day purchases from savings and move as much as possible from checking into savings so you can make a little interest on it.

Only One Card
You only need one card. You're spending your own money anyway - another card just means it's more difficult to keep track of your balance.

The Benefits
You can see the simplicity and advantages of this system. Here are the main advantages:

1. You'll establish really good credit within a year
2. You'll never pay interest or be in debt for using your card
3. You can move your money from your checking account to savings and earn some measly interest
4. Your money continues to earn interest for a month after you spent it

That's it! Good luck, be responsible, and don't spend what you don't have!

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