Joshua Cleveland, who graduated in May 2005 with a master’s degree in management information systems, found out about credit cards the hard way.

“It wasn’t the big things that cost money,” Cleveland said. “It was all the little things: drinking, coffee, cigarettes.”

Cleveland opened his first credit card account during his first year of college in 1999. He mostly spent under $100 on purchases and found the credit card bill only required him to pay a small percentage each month.

“What’s $15 to not have to pay $1,000 for a month?” Cleveland said.

However, Cleveland noticed his bill getting higher and higher each month and discovered the fun of “free money” fizzled out fast when he had to start paying interest.

Soon, Cleveland’s budget became stretched too thin, as he struggled to pay off credit cards and still cover expenses like food and rent. Eventually, he just stopped paying the credit cards; he was trapped in debt, and he didn’t know what to do.

A national trend?

Cleveland’s story is not altogether unique. Federal Reserve statistics show total consumer debt has risen from $1.7 trillion to $2.2 trillion since 2000, a trend which is only reversible through smart credit decisions.

On Jan. 1, new legislation went into effect, forcing credit card companies to charge at least 4 percent of the total balance as a monthly minimum payment.

Until now, paying only a minimum payment did little more than balance out the monthly interest, leaving many consumers trapped in an endless loop of debt.

How to build good credit

Finance chair Richard Dowen said even with the new legislation, college students are still at risk; student loans and credit cards together can add up quickly.

Dowen recommended students use a credit card for emergencies and purchases that are within the limit of other funds in pocket or in the bank.

“Never spend more than you can pay,” Dowen said, “unless you know that you have the cash flow.”

Failure to pay on time can affect a credit record for decades and Cleveland knows this too well. He settled with a collection agency years ago. Over the life of his accounts, Cleveland had accrued a balance of $4,500, with at least $1,500 being interest and fees.

Everything is paid off now, but obstacles still linger. A bad credit record keeps many consumers from being able to buy a car or house.