Students warned over credit 'gimmicks'

Debt can be very stressful, but a credit card could add to woes

Students have been warned to be wary of credit card companies offering "gimmicks" such as free cameras and book tokens.

The National Consumer Council (NCC) said credit card debt could push students "over the edge", as thousands of young people prepare to start their university courses.

Huge debts of as much as £11,000 are an increasing reality for many students, and there are worries that an increasing number are using credit cards to top up their student loans.

The NCC and the National Union of Students (NUS) want students to see beyond the gimmicks and make sure they understand the often high charges linked with credit cards.

High debts

Engineering student Natalie, who is in her fourth year at Cardiff University, is one student who fell for a gimmick.

Are credit card companies guilty of luring students into even more debt? Send in your questions to our forum

She took out a credit card to top-up her student loans.

"The offer of £50 worth of book vouchers seemed very appealing too - especially as I knew I would have to spend a fortune on textbooks."

She says she has now missed lectures so she can work to pay off her debt.

"My advice to any student thinking about a credit card is: don't go there unless you really have to."

NUS President, Mandy Telford, said: "Don't be sucked in by free promotional offers when you open a credit card account.

"Make sure you read the small print and fully understand the charges that come with credit cards."

Your comments: I am about to start my fourth year of university. After receiving loans every year, I am already looking at debts of over £12,000 when I graduate. Add on top of that a couple of grand in overdrafts and credit cards and the total will most likely be over £15,000. When you are already bound to be 12K in debt, what does another few thousand matter. Most people at uni will end up in a large amount of debt. I'm only glad that I will not be at uni when students are expected to pay £3000 a year! In an age when people are being encouraged to start putting money into pensions earlier and earlier and get onto the property ladder asap, surely the prospect of such things will be delayed by years of student loan repayments
Graham, England

It seems completely ridiculous that the educational elite are surprised that if they spend money on a credit card they will have to pay it back with interest. What do they think 18.9% APR means? If they have the discipline they can open a credit card account and take advantage of the promotional offer, and then cut the card up. Nowhere in the small print does it say that you have to spend more than you can afford to pay back.
Jim Benson, UK

Surely the credit card companies are just doing what every other business in the country does. If a student gets a credit card so that they can get free gifts then they are allowed to do this. However does the credit card company force the student to use the card? The answer is clearly no, so if students get into debt by using the credit it is their choice and no-one else's.
David Stiff, UK

I left University in 1995, then I owed near on £10,000. I finished paying off my student loans some years ago, though one large debt that I defaulted on at the time, for near on £5,000 I am still paying off now at £50 a month. I don't even know how much longer I need to keep paying this, but a few years at least. One day I will become debt free! I feel very sorry for students today as the whole country has a borrow now, pay later attitude, every shop, bank, advert on radio and television. It will surely lead to a large recession in the not too distant future.
Richard, England

I graduated 4 years ago. I am still saddled with 11+K in debt and 12K student loan. Most of the 11K are childcare fees for my son. While studying I believed a degree will give me better job prospects so that I can a bigger salary. In reality, you are likely to earn less than a construction worker (I'm just comparing to my neighbour who earns 30K compared to my 18K). I would have spend my time better working for those 4 years of the degree, moving up the career ladder and making savings, not debts.
Suzanna Ashraf, UK

Britain lives on credit. If we were required to live on our earnings, the country would be declared bankrupt tomorrow!
Benjamin Mearns, England

Jim, I think your scoffing at the "educational elite" is a bit unnecessary. Most 18/19 year olds have very little grasp on the reality of how to handle their finances, whether they are university students or not, and they don't realise the extent of the debts credit cards can saddle you with in terms of interest, extra charges etc. Most students are struggling to make ends meet in the present, & future debts is the last thing on their mind when they use a credit card. It is the same way that a lot of poorer people in this country get themselves into debt with huge loans & other bills - they need the cash to survive day-to-day & it is often the only way they can get it. The credit card companies know this, & know that students are one group of people less likely to consider future ramifications of credit card spending & therefore they target them. It's not surprising so many students get sucked in & the NUS are doing the right thing trying to warn them of the consequences.
Jo, UK

I remember having to use my credit card (thankfully my only one) to buy food in my final year, I didn't spend my money on going out and I had a part time job. I'm not entirely sure how some people run up the GBP30,000+ debts just on cards, but I do understand that for some people there is no alternative and banks take advantage of this.
Hannah, UK

It seems that all the banks are trying to get students to have their credit cards. Where the incentive used to be on the bank account (eg. a four year railcard) Now the incentives are put on the credit card. Also why is no one investigating the banks that refuse to extend overdraft limits but will extend credit card limits without question, that's where the real problem is.
Gemma, UK

It seems that people often underestimate the actual debt student are in. Within the above article it quotes debts upto £11,000. My loans (to be able to eat and have somewhere to sleep) will amount to around £14,000 when I finish my four year course. I could add another £2000 onto that for money from other sources. It is obvious that students may potentially become major earners, which appeals to credit firms and banks. This leads to the great deals. However maybe in order to overcome the problems associated with "oh it's just another thousand" then a reform of the loan system needs to be looked at.
Richard Connelly, UK

Don't ever let student debts deter you from University. I am currently paying back 13,000 worth of debt and if managed properly it is not such a hardship. Only advice is to stay away from the credit cards.
Richard Mccarvell, England

I have debts of £15000 after leaving university and so does my partner. We struggle to live and pay of the debts. My brother goes this year; he has a low income bursary and student loans. After paying his accommodation for the year he is £500 in the red before he has even considered food, transport and books etc. The system has to change we need to reduce the numbers going to university and provide real funding based on ability. My brother is on an engineering course and has 37 hours of lectures a week so a job is not an option.
Chris, Uk

I have just completed my degree and have a large student loan hanging over me. I don't think these credit cards would cause a big problem, so long as you are organised with your finances. I signed up to a credit card company because they offered a free mobile phone. I got the freebie and then didn't use my credit card, which after a year I cancelled but I kept the phone, so it can be worthwhile.
Mohammed Zaman, UK

Should the universities be encouraging the credit card companies? I finished uni last year and while I was there, at the beginning of every term, the university allowed a credit card company to set up in the foyer of the library to offer free gifts to the queue of students going through the turnstile. This environment is particularly unsuitable because you couldn't talk to the company about the product it was offering to get the full story, they just want you to sign up and go.
Rachel, UK

Banks are also to blame for pushing credit cards onto students. When I was in the second year of university, I wanted something like a 200 pound extension on my overdraft. My bank insisted that I take out a credit card before they even extend my overdraft.
Helen, UK

I'm sorry, but people are over exaggerating the nature of student debt. Most graduates enjoy a significant wage premium and higher rates of unemployment. Also the student debt comes out of income at source, i.e. like a tax, so you don't ever miss the money. Just learn to budget.
Duncan, England

Three years on from graduating and I am still struggling to pay off the credit cards I took out when I was at uni. Grants and Loans hardly cover things like rent and books in London and even though I was working I still found myself really struggling. Banks also put pressure on you by making you take on overdrafts, cheque guarantee cards and credit cards so you can get a rail card for free. I was sucked into this by the free offer and felt it would be worth it as it would save me so much money on train fares when I wanted to come back home to the north east.
M C, uk

If this adminstration didn't have the stupid target of 50% of people getting a degree, then there would be the money to give grants to the truly elite few per cent and avoid this whole sorry mess. What is the point of this 50% target anyway? I observe now in the job pages that companies routinely ask for a first or MSc where twenty years ago they would have asked for a degree.
Justin Rowles, UK

Student debt is here to stay and there is nothing you can do about it. A lot of the issues being raised are the fact that today's children are basically spoilt and believe they need everything now. They have no idea about handling their own finances, which in turn has lead to the massive overspend each year. The true effects of this will not hit our ecconomy for about another five years, but when it does we had better hope we are in a stronger financial state than we are now.
Tim, UK

I went to the US for uni. Even after my Sponsor paid for a year of fees I left with over 60,000 in debt after 2 years. I think that the UK has still got it good! As for Credit cards ... I am sure they teach you at school that there is no so such thing as a free lunch !
Stuart, Scotland

We need to educate our children about debt management and financial planning. I think quite a few people get used to living with debt while at Uni. Then they go into the workplace and, earning high wages in secure jobs, get offered loans, interest free balance transfers, etc. Then they need a car, work clothes, etc. - more debt. Some are able to fund a house deposit (though I know of a few people starting out on a 100% mortgage) and then think that the debt is okay because house prices are rising, right? Pensioners are even taking out mortgages to fund their retirement. Low interest rates are one thing, but what happens if they go up? Wage inflation has also pretty much stagnated, wtih companies moving chunks of administrative jobs offshore. Though there will likely be a injection of redundancy payments to fuel the economy (after all, it can't be that hard to find another job); what about the medium term prospects for growth? Will there really be enough demand to keep property prices rising?
Nick G, UK

I think that schools should have a "How to manage your finances" class. The class could only be for a few hours in the summer term. I think this would help students understand the implications of poor financial decisions. We're not born with good financial decision making skills, it is all learnt from experience. Perhaps if students with crippling debts had received some advise early on they may not be in this situation. Students WILL be in debt, due to the introduction of university fees but at least they may be able to stop the debt spiraling out of control due to them simply spending what they don't have.
Luvvie, England.

It is difficult coping with the thought of all the debt and the worry can be hard to cope with. However, I earn more than my friends who didnt go to uni, and in 5 years time I will have more than made up for the student loan. I can look at a 40k wage in 5 years. If I hadn't gone to uni I would be nowhere near that!
Pete, England

I don't see the credit card student thing - there are as many non-student that get into the same debt problems! It seems some people are just really bad at managing their finances.
Mike, UK

There are too many people in University. Let less people in and that's half the problem solved.
Mark Wisom, UK

My 18 year old daughter received offers for credit cards weeks after reaching her 18th birthday. Many friends tell me they throw away the letters from the banks before their kids even see the post. I suggest all schools should at the very least should teach children how to balance a cheque account and how to budget a weekly amount and keep to it.
Richard, UK

Credit cards are not so much a choice as a necessity for some students. The basic loan doesn't cover even basic food and rent in expensive areas such as Leeds. As such students are forced to spend on cards whether they want to or not. The answer is not for students to stop using credit cards; but rather for the Government to fund HE students properly in the first place.
Gareth Smith, UK

I graduated from Liverpool University a year ago where I completed my Master's degree. I have my dream job as a result of my qualifications. However despite earning £20.5k per year I need a part time job as well in order to pay off my heavy student debts (approx. £18K) that I have incurred. I got stucked in by the credit card companys so now have an additional £3k on my credit card which is impossible to pay off, the situation so stressful and I am spiralling more and more into debt. I am so happy to have a good career but the fact is I have to work an additional 18 hours a week on top of my basic 37.5 hours seems unbelievable. My advice to any student is stay away from credit cards it's impossible to get out! I really feel for the students of the future, I know how impossible I find it, I just hope the government wakes up and realises what they are doing to the next generation with these ridculous fees!
Heather Rich, England

Students will have to stop and think before applying to go to Uni - will the degree they are studying for enable them to obtain a job / career with a large enough salary for them to be able to pay their debts off? A degree no longer guarantees a large salary - I dont have a degree, I am a Nurse earing £29k - so it took a few years to get to this level of earning but I wasnt saddled with a debt at the end of my training.I'm starting an MSc next month, but Im lucky in that my employer is paying my fees and giving me study leave - as well as still paying my salary.
Jayne Robson, uk