Student Loans: Five big mistakes that students make with credit cards.

Credit cards and students don't always mix well, mostly because easy money is too soon spent

But if students avoid these mistakes then they will have an enjoyable experience with money. This applies to any first time credit card user, but students are can also be away from home and that puts them at greater risk.
The Five biggest mistakes students make with credit cards are:

1. Getting a credit card without understanding the terms.

Credit cards are a financial contract. "I'll do this for this much, if you do pay me this much."
Contracts also carry consequences.
Do you know what those consequences are using your credit card, and who might be affected, besides yourself?
For instance, do you:

• Know the interest rate on your credit card
• How that interest rate is calculated
• What penalties apply if you breach the terms of the contract?
• What those breaches will cost you in money
• What those breaches will cost in your parents credit score if they are guarantor
• What those breaches will cost your future credit?

If your parents guarantee the loan what will happen to their credit and repayment costs if you default?Do you know all the ways you can default on a credit card loan?

2. Buying things you don't need because you have a credit card

Its so easy to buy with a credit card. The money isn't real and its painless. Everybody's doing it right.
Retailers love credit cards because they know people, especially students will spend more because they have a credit card.
Here's a few credit card tips:

• Always know your monthly budget
• Never buy what you know you can't afford to pay off in advance.
• Never go to sales, just because you might find a bargain. Target purchases in sales that you know you need.
• Never buy lunch with a credit card. Get cash out and then buy.

Remember the average student carries over $3,000 in credit card debt. Do you know how much that means in payments you have to make every month, just to cover the minimum repayments.

3. Make do with just one credit card

The average student carries 4 credit cards. That's four ways to get into debt. Four service and monthly fees.

Remember if you fail to meet the minimum requirements on your credit cards your credit score will tank and then all the interest rates could increase.

4. Keep track of credit card purchases

It easy to have $100 in your wallet and then wonder where it went by the next day.
Well a credit card is like having that $100 constantly replaced with fresh ones. You need to keep count and keep track. Otherwise you will soon max out your credit and card.

5. Pay less credit card interest

Choose the card with the least amount of interest payable. Know the terms of the contract and ensure you don't breach them.

• You will always have to pay back the credit card debt 
• Plus interest 
• Plus service fees and charges 
• Plus credit card baggage if you mess up. 

When you mess up your credit scores, every credit reporting agency gets to know about it. There is no where to hide. You need to know this before you use that credit card the first time, not when you have a mountain of debt and no way to repay it.

If you buy something for $500 and it ultimately costs over a $1,000 in interest repayments, added fees and charges and penalty fees and interest, and extra interest rates because you have destroyed your credit, was that $500 purchase the bargain you thought it was?

Credit cards make it easy to get what you need to complete your studies.
It also makes it easy to get whatever you want. Know the difference.
Source: Mr Mortgage