(Part 1 in a series on students and credit.)

Credit card proposals inundate mailboxes every day, offering large credit limits, low introductory interest rates and special offers.

Filling out the pre-qualified forms is easy, but spending the line of credit happens quickly.

Realizing that all of that money has to be repaid is often something students are not prepared for, yet establishing good credit is essential for future lending opportunities.

Gary, a former South and NE Campus student, started using credit cards when he was a 19-year-old college student. He amassed a $20,000 debt that has taken him 20 years to pay off.

"I was planning all along to pay the money back, and then I realized it would take me a lifetime. I just wanted a fresh start, but my parents would not allow me to just walk away from the debt, nor would they help me pay it off," he said.

Gary worked with a credit service to arrange to pay a small amount each month at a lower interest fee.

"Even though I am married, I knew I couldn't afford a new house or buy nice things like a new car. I have struggled for years and realize how horrible bad debt is," he said.

Credit cards are probably the easiest way to establish credit history. Many lenders reduce lending criteria for students, often not requiring any credit history before giving a line of credit.

"They [credit cards] are often easy types of loans, an unsecured loan, to get because they start off at low credit lines, which minimizes the risk of the creditor and helps the student lender begin to establish a credit history.

"These cards establish the ability of a student to make on-time monthly payments, which implies they know how to manage their money and debt," Brad Corn, financial analyst for CitiFinancial International, said.

Students are a high risk to lenders partly because of their lack of credit history and also because they tend to have part-time, unstable jobs and are frequently unable to repay their credit balances.

Most students are living on a limited budget, and they know how much money is coming in each month, but they do not allocate for their monthly expenses.

A common mistake students make is charging everyday expenses like meals and gas and not paying the balance each month.

It is good to have at least one card for emergency situations such as unexpected car repairs, not a new outfit or taking a friend to dinner.

A growing credit card balance will mean larger minimum payments each month. A credit card is a way that students live beyond their means.

There is no magic number for how many cards a person should have; it depends on the individual's financial stability. Ideally, a student should have savings in the bank that they could draw from if necessary.

While accumulating his $20,000 debt, Gary used seven different cards.

"I realized what I was doing was stupid, but I couldn't stop myself. I just kept thinking I would get a great job and pay everything off. It just didn't happen," he said.

Often students max out their cards and rely on another credit card to continue their lifestyles. Instead, students should focus on reducing their expenses and paying the balance on their credit card.

"Having maxed-out credit cards on your credit report is a sign that you don't have the ability to pay these balances down," Don Mackenzie, Bank of America audit consultant, said.

Another mistake inexperienced borrowers make is transferring a balance from one credit card to another in order to pay the balance off.

Balance transfers, moving a balance from one credit card to another, can effectively reduce the amount of interest a person pays each month. This can be especially helpful when a balance is transferred from a high-interest card to a low-interest card.

Balance transfers should not replace a monthly payment.

Gary said that he started using the trick to transfer his remaining balance on his credit cards to another credit card.

"The thing is, you may get a better interest rate, but you still owe the money," he said.

The trend is for a student to have more cards in order to continually transfer balances or continue maxing out cards. The more cards a person has, however, the more negative impact they will have on the individual's credit.

"Potential creditors will evaluate credit not only in terms of credit line utilized on existing accounts, but also on the combined credit limits of these accounts. For example, if it is established that you have the potential to incur $100,000 of credit card debt among 10 cards, this is a negative, even if you have relatively low balances on the account," Joe Toner, financial analyst CitiFinancial International, said.

Another mistake students frequently make is taking credit for granted and missing payments. A bad payment history has the biggest negative effect on one's credit rating.

"Payment history is the single most important factor in determining a person's credit score," Mackenzie said. "Students should make every effort to make at least the minimum payment if possible."

Missed payments and over limit charges can cause the interest rate to increase to the credit card's penalty rate, which is usually 22 percent. These mistakes can remain on one's credit report and affect one's credit score for years to come.

A credit score ultimately affects the rates a person pays for credit. Lenders view low credit scores to be at a higher risk to delinquency and inability to repay loans.

"If a student is behind on his payments, he should work with the lenders to develop a repayment program that both the student and the lender can live with," Mackenzie said.

Having a credit card is a matter of responsibility.

The most important thing a student can do is make at least his minimum payment and make it on time in order to maintain good credit.

Gary still uses a credit card, but he does it with caution.

"I make only big purchases with a credit card now, and my wife and I are very careful about charging anything. I have learned a debit card is better, and cash is best," he said.