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To this day I can remember getting my first credit card as a freshman in college! I ripped open the envelope and thought—EUREKA!—I'm in the dough now. In record speed I was at the local shopping mall  to use that newfound wealth (or so I thought) to buy those must-have jeans, shoes and music. All in all, it probably took me less than 42 seconds to reach my credit limit of $300.

I cannot tell you how wonderful it felt to put on those fabulous new jeans and shoes. I was styling! For the next 24 days I was carefree, not a money worry in the world.

Then reality hit: The credit card bill arrived.

My initial thought was, no problem—I'll call my parents, share the good news of the nice clothes I'd bought myself, and ask them to help me pay the credit card bill. My Dad did not skip a beat in his reply: “You charged it, you pay for it.” Although I attempted every reasonable angle and even a few tears, they did not cave. I had to find the dollars to pay for my shopping spree.

Oh well. I reviewed the statement and saw I only had to make a minimum monthly payment of $15. No problem—I could handle that. But then I looked a little more closely and did some quick math. With minimum payments (and interest) it would take me longer to pay off the bill than my new shoes would last!

In the end, I had to give up more than a few fun weekends each month—four months to be exact—before the bill was paid in full. I can definitely say sacrificing my time with friends to save money and work extra hours at my campus job was not a highlight of my college experience.

Yep, I got my credit education the hard way. In the coming weeks, we'll be discussing credit education in more detail. I'm sure you have your own credit dilemma or fun story. Please, share your experience!

Pam

My niece is already getting ready for college next fall—her test scores are in, the acceptance letter is taped to the mirror in her bedroom, and now we are working our way through student loans. As we were discussing her options, I asked her to make sure she considered loans that had the best interest rate in addition to loan terms.

She looked at me like I was speaking another language. "What do you mean interest rate?" she asked. "The only interest I know about is what my bank pays me on my savings account and a CD I have."

Whoops—I realized we had an information gap here on interest! This called for a quick "interest" conversation.

OK, let me make this easy. When you deposit your money in a savings account or CD(Certificate of Deposit), the bank or credit union pays you for having that account. They use your money and other depositors' savings to lend money to their other customers, so they pay you interest to use it. Think of it as rent—the bank is renting your money. The more money you put in and the longer you keep the money in your account, the more interest you'll get paid over time.

Now the flip side is this: When you borrow money for something you want, like an education, a car, a home, etc., the bank or credit union charges you interest. Here, you're renting the money from the bank, so you pay the interest. The interest a financial institution charges for loans is not only how they make money but also how they have money to pay you interest on your savings. And the interest rate you pay will vary depending on how much—and for how long—you borrow.

After a couple of minutes, my niece looked at me and said, "Wouldn't be easier just to say when I deposit money I earn interest, and when I borrow money I pay interest?"

She's right—fewer words and right to the point.

Anything about earning or paying interest you find perplexing?

Pam

I don't know about you, but I am often in a shopping dilemma—do I use my credit card to buy this, or do I use my debit card? Do I want to pay for this over time (plus interest), or do I have the money in my checking account to cover the cost of what I am buying? Both cards are such an easy, convenient way to shop without having to carry any cash. So I try and keep these simple points in mind:

• Use my credit card—essentially I am borrowing money I have to pay back!
• Use my debit card—the funds come right out of my checking account, so do I have the money in my checking account to cover this purchase?

I find that I do need to use both cards—each has a benefit for me:

• Credit card—when I use within my spending limit and pay on time, it helps me build a solid credit rating. So very important!!
• Debit card—since I know I have a limited amount in my checking account, it helps me stick to my monthly budget. It is so nice not to have monthly credit card bills in my mailbox!!

Compare the two payment types for yourself:

How do you determine when you are going to use your credit card or debit card?

Pam

I spend about 10 hours a week trying to come up with fun, exciting, captivating new ways (although there is really nothing new anymore) to talk with students about being smart with credit cards.

Yes, I do have a life ... but not only is it my job to promote financial education, it's my passion. When I read the latest research or see in the morning paper that today's students are spending over $175 billion using credit cards, I freak! I realize that we as a society have become too dependent on plastic to live day to day. So, it seems everyone can use a few pointers on "credit card smarts."

Have you even thought about how you use credit cards? I only have one (I live for those United frequent flyers miles), but my mom has 28 credit cards—yup, 28 of them! She has one for every department store at the mall. She actually believes she saved money by opening a new credit account at each store because she got 10% off her first purchase—YIKES.

I asked her if she knew all these open credit accounts impacted her credit report. You can guess what her reply was ... She had no idea. My next question: "What is your interest rate on each of those cards?" Her reply: "I have no idea." She showed me 11 credit card statements—fortunately, all had zero balances—but the APR(annual percentage rate) ranged from 18% to 27%. When I walked her through the cost of using these cards I thought I'd lose her—CPR needed any minute. Although it took a few more conversations, she has now closed 17 of these accounts—not all, but a terrific start. Definitely an "A" for effort.

This was not an easy conversation for us to have, but we both learned a few things:

• Credit cards are easy to get—but not good for your financial health.
• Shop around for your credit card—compare interest rates.
• One credit card is plenty.
• 10% off your first purchase or a free T-shirt does not make a good credit choice.

Many of you may just be getting started with credit cards, but you may already find yourself experiencing some "questionable credit card" experiences. How do you determine when to use your credit card?