During the first day of term, students rush to spend following replenishment of their bank accounts. They do so with full awareness of interest and debt but they worry about those trivialities later. A study recently conducted by Impact revealed how University of Nottingham students view their spending habits.

Most research indicates that a student typically graduates with up to £23,000 in debt. Forty-three percent of students in this study said their debt will fall between £20,000 and £30,000. What is amazing is that 54 percent think they can pay off this debt in one or two decades.

Government loans are not repaid until the graduate earns more than £15,000 and at a rate of nine percent of the earnings over that figure. Repaying these cheap loans typically equates to paying a bit higher income tax. Non-government financing and credit cards are other story.

Of those surveyed, 37 percent owned at least one credit card and 14 percent said they occasionally used it. Banks do not seem to be educating students on the risks of this credit because 72 percent of respondents said credit rating was never discussed.

Establishing a credit rating helps secure future mortgages and loans. However, students should be careful not to miss repayment deadlines or enter overdraft territory. This could create a six-year blemish on the credit record.

Credit history is reviewed for mortgages and loans bank and building societies provide and a less than perfect record may lead to rejection.

The real credit villain is the store credit card. All too often, students find themselves facing late payments and other charges because they are not aware of card policies. An amazing 40 percent of people who hold these cards are not familiar with associated interest rates.

If students are not careful with spending and debt repayment, things can quickly get out of control.

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