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How Students Use Credit Cards

Posted By Jim On 04/22/2009 @ 2:37 pm In Credit | 10 Comments

Each year, Sallie Mae does a national study on how undergraduate college students use credit cards and their usage trends. 2009′s report was released this week with a bang because they discovered that credit card usage has increased to levels never seen before.

Here are some staggering statistics:

  • Students have an average of 4.6 credit cards!
  • 84% of students have at least one credit card.
  • The average (mean) balance is $3,173, the highest ever recorded in the study’s history.
  • The median balance was $1,645 with 21% of students having between $3,000 and $7,000 in debt.
  • 39% of students already have a credit card before they arrive on campus.
  • Median debt of those students was $939, up from $373 in 2004, with only 15% having a $0 balance.
  • Students graduate with an average of $4,100 in credit card debt with almost 20% having more than $7,000 owed on credit cards.
  • A third of students rarely or never discussed credit card use with parents.


The report goes into much greater detail but two things jump out at me:

  1. A lot of students are getting credit cards before they even show up for college. The study went on to talk about how students respond to marketing. 38% respond to mailings and 19% are referred from a parent. In both cases, the parent can be a gatekeeper to help education their student on how to make smart financial decisions. Remember, you can’t get a credit card until you turn 18.
  2. A third of students rarely or never discuss credit card use with parents. That was the most telling statistic in this entire survey, to be honest. It’s great that 65% did discuss it with their parents but that other 35% can see some immediate gains as long as they talk about how to use credit cards better. It’s not a panacea but if you’re a parent and you aren’t talking about credit cards with your child, you should be.

I think that credit card education is a lot like sex education, minus some of the sensitivity. You can expose and educate students on the topic so they can be knowledgeable and make the right decisions. Or you can shield and protect them yourself until they’re ready for it. In both cases, students are getting exposed to the topic at younger and younger ages.

If you’re a student and reading personal finance blogs, I commend you. I recommend checking out my post on smart student credit card use [3] and my 40 money tips for college students [4] for some suggestions on how to be smarter with credit cards.

How Undergraduate STudents Use Credit Cards [5] (SallieMae.com, 1MB PDF)


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[3] smart student credit card use: http://www.bargaineering.com/articles/best-student-credit-cards.html

[4] 40 money tips for college students: http://www.bargaineering.com/articles/40-money-tips-for-college-students.html

[5] How Undergraduate STudents Use Credit Cards: http://www.salliemae.com/NR/rdonlyres/0BD600F1-9377-46EA-AB1F-6061FC763246/10739/SLMCreditCardUsageStudy41309FINAL1.pdf

Thank you for reading!