This is the first of a two-part series regarding college students and their use of credit cards. This post attempts to give an overview of student credit card use by presenting some statistics taken from Sallie Mae’s National Study of Usage Rates and Trends of Undergraduate Student Credit Card Use released in April 2009. In our next post, we’ll discuss how parents can help students think about their use of credit.
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.
The following are some statistics which may give college parents pause to do some thinking about their student’s use of credit. These statistics were released in a recent study by Sallie Mae conducted in the spring of 2008, regarding college students and credit cards. You may find some of these facts surprising.
Who has credit cards?
- 84% of undergraduates have 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 is the average balance carried by college students.
- 21% of students carry a balance between $3000 and $7000.
- $4,100 is the average credit card debt of graduating seniors.
- 19% of seniors graduate with a balance greater than $7000.
What do students charge?
- 90% of students report paying for direct education expenses with credit cards.
- 30% of students put tuition charges on credit cards.
- 76% of students charge textbooks on credit cards.
- 75% of students charge school supplies on credit cards.
- 84% of students use credit cards for food.
- 70% of students use credit cards for clothing.
- 69% of students use credit cards for cosmetics.
How do students use credit cards?
- 40% of students say they have charged items knowing they didn’t have the money to pay the bill.
- 17% of students regularly pay off all cards each month.
- 1% of students have someone else paying the bill.
- 82% of students carry balances and incur finance charges each month.
- 7% of students admit to paying less than minimum required payment each month.
How do students feel about their credit?
- 60% of students experienced surprise at how high their balance had reached.
- 45% of students experience high levels of anxiety about paying credit card bills.
- 30% of students say they rarely or never discussed credit card use with parents.
- 84% of students say they need more education on financial management.
- 64% of students would like to receive financial information in high school.
- 46% of students would like information about budgeting.
- 45% of students would like information about savings strategies.
- 49% of students chose “from parents” as their first or second choice of where they would like to receive financial information.
Numbers can tell us a lot, and it is important that we consider some of the sometimes surprising numbers provided here. But numbers don’t tell us the whole story. In our next post, we’ll continue to examine some of these numbers and also consider what parents might do to help their college students to understand and maximize their use of credit cards.