Ten myths that can lead to debt!

» 1. 'I'm only having a couple of glasses of wine...that can't hurt...can it?

One glass? Possibly not. But a large glass can cost from £3.50 or more. Have 2 or 3 glasses and that's around ten pounds per night. Lots of small amounts can soon add up to £40 or £50 pounds per week!

» 2. 'My bank loves me...it must do as it keeps increasing my overdraft so I must be doing ok!'

They might love you but only because they know you will 'max out' the overdraft, which means they make more profit on interest charges and the letters they will send you!

» 3. 'I can save money in shops by signing up to a store card just to get the on the spot discount?'

Yes you could but can you trust yourself not to use the card again...and again. Store cards are one of the most expensive ways of borrowing money because of the large interest rates they charge!

» 4. 'One more credit card won't make any difference!'

That depends on how much you owe on your other cards and whether this new one will just add to the debt you already have. Shopping around for the best interest deals on cards is good - some cards will also offer you a low interest to transfer your other balances over. But running up huge amounts of debt on credit cards is not! They are expensive to pay back.

» 5. 'There is no such thing as a credit blacklist...it's a myth to scare big spenders!'

There may not be a 'blacklist' but credit ratings are very real and if you get into debt or are late with re-payments you will increasingly become undesirable to lenders! This could affect your ability to get a mortgage in later life or may mean that you can only borrow money in future if you agree to pay inflated interest rates.

» 6. 'But those things in the sale are a bargain. I'm actually saving money by buying them!'

Ok so it should have been £10 and you got it for £5. That still means there's £5 less in your bank account - £5 less to spend on food or pay down your debts. Bargains only save you money if they are things you absolutely have to buy - like food.

» 7. 'You can't expect me to cancel my gym membership or Sky TV they're an investment in my health and education!'

Exercise is very important for your overall wellbeing - the Student Union gym, Fizeek is cheaper than most gyms and open to all students. Alternatively, you could plan longer walks or runs into your day. There are lots of free ways to keep fit.

Sky TV may help you in your studies but it is expensive and you can usually find alternative, cheaper ways of getting the information that you need.

» 8. 'If I get into trouble my bank will give me the best personal loan!'

Your bank is not a charity. If they know you are in financial difficulty and have to borrow they may well charge you a higher rate of interest. Most of the best deals on personal loans are found away from the high street so if you do have to borrow make sure you shop around.

» 9. 'If I need some rainy day money I can sell my computer!'

Most students agree that their computer is vital to their degree and the cost of computers is so low now that probably you will not get that much for it. It's more realistic to budget your money so you don't have to sell it in the first place.

» 10 'If all else fails I can go bankrupt!'

Students can no longer go bankrupt to get rid of student debt! And even if you could, bankruptcy can cause major difficulties for you. You would not even be able to get a mobile phone contract much less any other kind of credit.