What’s free when you get it, but can wind up costing you thousands?

Answer: A credit card.

Unfortunately, a large portion of college students are carrying a lot of credit card debt, often paying interest rates in the high teens.

But help is on the way. President Obama recently signed into law a bill that aims to rein in credit card interest rates and excessive fees.

Even more important: The majority of college students may be out of the mix entirely.

Credit card companies will no longer be allowed to give cards to people under 21 without a guardian as co-signer – or unless they have the means to pay off a debt.

The law reform comes none too soon.

Take a look at this year’s stats compared to 2004:

• Last year’s graduating seniors owed an average of $4,100 – an increase of $1,200.
• 30% of students charged their tuition to their credit cards – a 6% hike.
• 92% of undergraduate students put textbooks and school supplies on their credit cards – a 7% increase.
• The average amount students put on their cards was $2,200 – up from $942.

Credit card companies have nine months to change their ways. The measure includes restrictions on late and over-limit fees and on arbitrary interest rate increases.

Do most students at your college pay for tuition and/or books with credit cards? Let us know in the comments section below.

Tags: credit card, President Obama, tuition