Most college students use credit cards. Credit has become a part of the fabric of college life. Many college students use credit cards out of necessity, and many college students use credit cards wisely, but college student debt is mounting. Many parents of college students who are over 18 may not know whether their student has a credit card, or multiple credit cards, or whether their student is carrying a balance.
( Numbers can tell us a lot, and it is important that we consider the sometimes surprising numbers regarding college student use of credit cards. In this article, however, we consider not only the numbers, but also what parents might do to help their college students to understand and work with their credit cards. )
WHO HAS CREDIT CARDS:
84% of undergraduates had at least one credit card.
4.6 is the average number of cards held by college students.
50% of students have 4 or more credit cards.
2% of students carry no credit history.
39% of students already have a credit card before arriving at college.
HOW MUCH DO STUDENTS OWE:
$3,173 – Average balance carried by college students.
21% – Students balance between $3000 & $7000.
$4,100 – Average credit card debt of graduating seniors.
19% – New Graduates with a balance greater than $7000.
WHAT DO STUDENTS CHARGE:
90% – Pay for direct education expenses with credit cards.
30% – Put tuition charges on credit cards.
76% – Charge textbooks on credit cards.
75% – Charge school supplies on credit cards.
84% – Use credit cards for food.
70% – Use credit cards for clothing.
69% – Use credit cards for cosmetics.
HOW DO STUDENTS USE CREDIT CARDS:
40% – Charged without having funds to pay the bill.
17% – Regularly pay off all cards each month.
1% – Someone else is paying the bill.
82% – Carry balances & incur finance charges each month.
7% – Pay less than minimum required payment.
HOW DO STUDENTS FEEL ABOUT THEIR CREDIT:
60% – Surprise at how high their balance had reached
45% – Experience anxiety about paying credit card bills.
30% – Rarely discussed credit card use with parents.
84% – Admit a need for education on financial mgmt.
64% – Would like financial information in high school.
46% – Would like information about budgeting.
45% – Would like information about savings strategies.
Sallie Mae’s National Study of Usage Rates & Trends of
Undergraduate Student Credit Card Use released in April 2009.