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HIGH-SCHOOL KIDS ARE BEING WOOED BY CREDIT-CARD FIRMS

When Charles Dempsey's youngest daughter went out of state to college, he gave her a credit card in his name for emergencies.

"She was driving the car back and forth," says Dempsey. "I thought it was good for her in case she had an emergency and needed a vehicle."Dempsey's daughter has since graduated from college, but credit card issuers, especially the huge banking companies with national business, are beginning to target graduating high school seniors in addition to the college students they have aimed at for years.

Typically, credit card issuers, like most lenders, look for people with regular income, stability, continuity of address and ability to repay, says Paul Richard, director of education of the National Center for Financial Education in San Diego.

Card companies do that with students, too, but not directly.

"The philosophy is that they have a backer," says Dempsey, director of the Memphis Consumer Credit Association information and counseling service. "A parent will usually bail them out of it if they don't get in way, way too deep."

So students and parents must weigh carefully whether to accept credit card offers and, if they do, how to handle card use. That is, parents must decide if their child is responsible enough to hold, use and handle the debt on a credit card.

Credit card companies float enticing messages before students.

"Credit card companies tell youngsters it's almost like a rite of passage into adulthood," says Richard. "It's not the right approach."

Ruth Susswein, executive director of Bankcard Holders of America, a nonprofit credit card industry watchdog based in Herndon, Va., says, "Sometimes the pitch is that this is a wonderful way to build a credit history that will be invaluable to you down the road. That is definitely true if students use their credit lines wisely."

But, she says, some credit card companies "entice you to take a spring fling with your new card, and even in their ads say you don't need a job or a co-signer to apply for a card. So we've got some mixed messages here."

Richard doesn't like credit cards for students much to begin with.

"It's a terrible way to start your youngsters off in a life of debt," he says. "It tells them that spending is OK. It tells them that debt is OK."

But he and others say education is the key if students are to have credit cards and use them without falling down a financial well.

"We are not opposed to students having a credit card," says Susswein, "but they need to be aware of the responsibilities of credit along with the benefits."

Too often, that education is lacking.

"We do not hand out driver's licenses in the hopes that someday people will learn how to drive. Why do we issue credit cards and hope someday they learn how to use it responsibly?" says Susswein. Her group favors required junior high instruction on personal finances, seminars put on by credit card issuers and parental guidance to provide the education.

Students get behind on their debts and end up with a poor credit record before they get into the work force, Dempsey says.

In fact, such a record may make it hard for you to find a job.

The basis of just about any job is managing people and assets, Dempsey says. "Employers pull credit reports on job applicants. You have a sheepskin that says you are ready to manage people and assets, and they have a credit report that says you can't manage you, you're not going to get that job."

Some people, like Dempsey, believe students should carry cards in their parents' names if students have cards at all. Others think those cards should be in the students' names, but all advise caution in making any decision to put a credit card in a student's hands.

Dempsey says giving your child a card with your name on it allows you to set limits on the card use and monitor spending.

With his or her own card, a student who pays regularly, even the minimum monthly payment, will see issuers raise his credit limits, and that could entice the student to get into debt troubles, Dempsey says.

Richard disagrees.

Giving a child a credit card with your name on it "is like getting a part-time job, going to work 20 hours a week and giving your children all of the money. It does nothing but teach them to spend."

"Our advice to the parent is if the child is going to get a credit card, let him get it on his own," he says. "Don't co-sign for it. First of all, it teaches youngsters they are responsible for their financial lives and will be from age 18 on."

Richard encourages parents to have their children save money, then get a credit card secured by that savings account balance. Such an approach teaches children the virtues of responsibility, saving and accumulation rather than instant gratification to get value, Richard says. They learn that they can save money when they come in to make a purchase with money in hand rather than borrowing it.

If the parents and students agree they should have their own credit cards, experts say they should shop around for the best deal based on how the card will be used.

If the student expects to carry a balance from month to month, you should look for a card with a low interest rate.

If you plan to pay off the balance each month, you won't be concerned with the rate, but will want a card with low or no annual fee and a grace period which allows time - usually 25 days - to pay off the bill without owing interest.

If you plan to get cash with your card, look for low cash advance fees. But whenever you use the card, you should ask yourself if you would ask a banker for a loan for your planned spending:

"Would I go to a bank and say, `Could I borrow $60 to go out for dinner with my friends tonight?"'