When it comes to handling credit responsibly, a new study gives college students high marks.

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A study by the Georgetown University Credit Research Center found that most young adults who qualify for a credit card while attending college have smaller balances, lower credit limits, and use their credit card less frequently than others in the same age range.

The study will be published in the November 2004 edition of the National Association of Student Financial Aid Administrators' Journal of Student Financial Aid.

Unlike previous efforts examining college student usage of credit cards, the study examined actual account activity rather than self-reported data.

The study also compared accounts opened by college students with accounts opened by young adults not attending college and older adults.

Key facts from the study include:

• 87.9 percent of college student accounts are current (paid as agreed) compared with 88.4 percent of young adults and 91.9 percent of older adults, showing that college students manage credit cards as responsibly as the general population.
• The average balance of $552 for a college student account is approximately one-third the size of the average balance of a non-student young adult's account ($1,465) and one fourth that of an average older adult's account balance ($2,342).
• College students are more likely to pay off their credit card balance in full each month than older adult accountholders.

The study is a good indication that college students, like most Americans, have become wiser about the use of credit.

According to the Federal Reserve Board's most recent survey of consumer finances, more than 55 percent of all Americans report that they usually pay their balances off in full each month.

Your Credit Card Companies, a group of financial services companies with a commitment to credit education, offers the following basic, but important, tips for practicing wise credit management:

• Make payments on time: Establishing and maintaining a history of making regular payments helps to improve consumer credit scores and can lower credit card interest rates.
• Track monthly spending: Design a reasonable monthly budget and do your best to stick to it. Track actual expenses as they are incurred. Notice whether you're spending more than you budgeted, and reduce your spending where you can.
• Evaluate credit offers: Credit card companies regularly solicit prospective and existing customers with better terms and interest rates to ensure that responsible users of credit have access to the best financing opportunities.
• Use credit within your ability to repay: Creditors evaluate whether consumers have too much debt and often need to raise credit costs to compensate for an increased risk of default.
• Review credit reports regularly: Obtain your credit report annually to make sure your records are complete and accurate.

Credit reports are inexpensive to obtain, and in a variety of circumstances, such as suspicion of fraud or denial of credit, consumers are entitled to free reports.

As part of the Fair and Accurate Credit Transactions Act of 2003, free credit reports will be available once a year from each of the three major credit bureaus.

The program offering free reports will be rolled out across the country beginning December 2004.