The College Student and Credit Cards . . .

College Parents of America

It is clear when we look at some of the numbers surrounding college student credit card use that credit cards are an important part of college student life.  Students often have multiple cards and they use those cards to pay for everything from tuition, to textbooks, to food and clothing.  Many students carry a balance – which may be because of lack of understanding or from irresponsibility – but which also may be out of necessity.  Student credit card use mirrors what we are learning about American society’s use of credit cards.

College students often find it thrilling to have their first credit card.  It is, for many, a symbol of adulthood and independence.  Today’s college students have grown up in a world that has increasingly used credit cards and electronic means for monetary transactions.  Paychecks are often directly deposited, bills can be paid online, credit cards are used for store purchases, restaurant purchases, on line purchases, gas purchases, movie tickets, groceries.  It is possible to go for days, and even weeks, handling very little actual cash.

There are some valid reasons why students may need to have a credit card.  It can be vital in case of emergency.  In the case of a medical emergency, a car breakdown, a need for an unexpected plane ticket home, having a credit card may be crucial.  Credit cards are often required to purchase anything on line.  Students use the internet for much of their shopping – including textbooks, gifts, and necessary personal items. Having a credit card – and using it responsibly – helps to build a credit history, something the student will need when he graduates.  Learning to use a credit card responsibly may take practice, and doing this with a lower limit credit card while in college may prove important.

There are also some dangers and drawbacks to credit card use in the college world. Credit card companies often woo college students with many offers of cards.  The companies know that parents may often help students out if they overspend.  They also know that the college student who takes a credit card may be a customer of that company for life.  It is good business for the companies.  However, many students do not understand credit history or credit score, APR, accumulating interest, credit limits.  Student credit cards often come with high interest rates.  Some students may be tempted by the instant gratification that credit cards provide, by the distant reality of paying off credit card debt.  Some students have a clear awareness of the issues, but have no choice but to use their cards to pay for their education.

Many solutions have been suggested to address student credit card debt. Some of these concerns are currently being addressed by the Credit Card Accountability and Responsibility Act recently passed by Congress.  Among other things, this will restrict students under twenty-one from getting a card unless a parent or guardian gives consent or the student can offer proof that he will be able to repay.  Debit cards may be a wise solution for some students.  Credit cards with lower limits for students might help them learn appropriate usage with less liability.

A student needs to consider the facts about the use of credit cards carefully.  Several of the statistics speak directly to us.  Nearly 50% of students surveyed said they experience high levels of anxiety about paying credit card bills.  Almost 30% of students say they rarely or never discussed credit card use with their parents.  Nearly 85% said they would like more education about financial management, and nearly 50% of students said they would like to receive financial information from their parents.

Parents can talk to their students about credit cards, debt, and financial planning – and the students are ready – and willing –  to listen. Find out whether your student has a credit card – or multiple cards.  Discuss whether he/she is carrying a balance, and if so, what you can do to reduce that debt.  Discuss how the card is being used.  Think about needs vs. wants, to try to pay on time each month and to pay in full if possible.

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. )


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.


$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.


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.


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.


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.

Statistical Source:
Sallie Mae’s National Study of Usage Rates & Trends of
Undergraduate Student Credit Card Use released in April 2009.