College students are racking up student loan debt at record levels, but, when it comes to college students and credit cards, it turns out they are pretty cautious spenders. That’s the good news!

A Sallie Mae report found that nearly two-thirds of college students pay their credit card balance in full each month and 26 percent make partial payments that exceed the minimum payment due. In fact, just 8 percent pay only the minimum amount due each month. Compare that to all credit card users — nearly 20 percent of them pay only the minimum each month, according to a study from TransUnion, a personal credit rating agency.

College Students and Credit Cards

But it’s not all good news for college students and credit cards.Though they are careful spenders, the Sallie Mae report also found that many don’t understand enough about how credit actually works.

According to the report:

• When choosing a specific credit card, a card’s cash-back benefits or rewards points ranked higher for them than a card’s interest rate.
• About 25 percent say they don’t understand basics about interest accumulation in a savings account.
• And about half of college students surveyed did not understand how payment behavior or repayment terms might affect the cost of their credit over time.

Without formal knowledge of how credit works, it can be easy for credit card spending to spiral out of control. A few missed months of payments can start adding up to a lot of headaches if a credit card user doesn’t understand just how much banks are charging them to borrow that money.

But, when it comes to college students and credit cards and finances, the study did find that college students are willing to take lots of advice. And the people they turn to the most, as it turns out, are their parents.

According to the study, 68 percent of students with credits cards said their parents influenced their choice. More than 40 percent of 18 to 20-year-olds, in fact, chose the actual card type or brand their parents use. And the majority of college students — 71 percent — said they learned money management from their parents.

So, parents, here’s your chance to influence how your kids spend their money today — and into the future.

Explain the basics

Starting even in middle school — or younger, depending on the child — let them know that there’s no such thing as “free” money. If we don’t pay off our monthly credit card bills, then we must pay through interest for the privilege to use them. Bank of America, in partnership with Khan Academy, offers an easy-to-understand guide about interest that parents can go over with their kids. The FDIC also offers money management resources for young adults and teens.

Consider letting them “practice”

It might seem like a bad idea to provide teens access to thousands of dollars on credit, but giving teens a credit card to use now, with your careful guidance, is a great way to build healthy habits. The Consumer Financial Protection Bureau says  a secured credit card, which typically requires a cash security deposit, can be a good idea for some teens. Parents also could make their child an authorized user on their own credit card account. Just beware: You’ll be responsible for any charges your child makes.

But don’t just hand them a card. First, search for a card or option together so you can debate the pros and cons of interest rates and annual fees. Then, set strict spending limits and consequences if those limits are exceeded. Finally, talk with them each month when the bill arrives to ensure they’re using the card wisely.

Be an example

If you want college students and credit cards to be a match made in heaven, the best thing you can do as a parent is to set a great example for your student. Are you in control of your own credit card debt or has it gotten out of control? If the monthly bills are causing you stress, now might be time to get some help. The team at CESI is committed to helping you make wise financial decisions and to helping you understand how to get out, and stay out of debt.  For a free debt analysis, contact us

This article was syndicated and originally appeared on the CESI Debt Solutions website.