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Credit Card Activity for College Students

CH-Statistic-Student-Credit-Card-UsageThe combination of a college student and a credit card terrifies many parents.  And it’s understandable, considering all of the parent-funded, plastic-facilitated shopping sprees we see depicted on reality TV and in the movies.  But do actual college students really use credit so recklessly?

The statistics below will help you answer that question, as they illustrate the average balance held on student credit cards as well as student payment habits, the percentage of students using credit by grade level, how credit and debit card usage habits compare, and much more.

Ultimately, it’s important to wrap your head around student credit card use, as it is the most efficient way for young people to establish credit history and improve their credit score.  Good credit is extremely important in the “real world,” as it affects your ability to get a loan, rent an apartment, lease a car, and even land certain jobs.

Average Credit Card Balances for Undergraduates

Credit Card Debt for Undergrads – $0 balances excluded

Year 2013 2012 2011 2008 2004 2002 2000 1998
Mean $925 $1463 $1097 $3173 $2169 $2327 $2748 $1870
Median $373 $459 $500 $1645 $946 $1770 $1236 $1222

Credit Card Debt for Undergrads – $0 balances included

Year 2013 2012 2011
Mean $650 $1086 $842
Median $179 $255 $289
         • 32% of college students have a zero balance and another    46% have less than $500 on their cards, while 2% carry a    balance greater than $4,000.

 

  • The average balance across all cards is $499. However, with the high proportion of zero and low balances, the median balance is $136.

(Source: Sallie Mae)

Average Credit Card Debt for Undergrads

 

  • As the chart shows, undergraduate credit card balances averages have steadily declined over the past 3 years driven primarily by an increase in grants and scholarships.

Credit Card Payment Habits for Students

Average Student Credit Card Payments

Average Monthly Payment 2013 Average Monthly Payment 2010
Students $6 $168
Parents $61 $259
Credit Card Payment Habits for Students
  • Between 2009 and 2013 the number of students paying off all credit cards has almost tripled
  • 95% of undergraduates are paying the minimum amount, or more on all of their credit cards each month.
    (Source: Sallie Mae, How America Pays For College, 2013)

Students with Credit Cards

 

  • When asked, 30% of undergraduate students reported having a credit card in 2013, down from 35% percent in 2012 and 42% in 2010. Credit card use has declined each year since 2010 after the introduction of the CARD Act of 2009 and in the wake of the recession.
  • The ownership of credit cards by students differs according to region and race/ethnicity:
    - Students living in the West are more likely to have credit cards (37%) than the students from Midwest (30%) or Northeast and South (26% and 27%, respectively);
    - White students (33%) are more likely to have credit cards compared to only Hispanic (22%) and African-American (24%) students;
    - The income level do not seems to influence the ownership of credit cards among students: thus 34% of high income students, 28% of middle-income students and 32% of low income students have credit cards.
    (Source: Sallie Mae, How America Pays For College, 2013)

Students holding credit cards (segregated by level of education)

Year 2010 2011 2012 2013
Freshman 23% 20% 21% 14%
Sophomore 41% 43% 28% 27%
Junior 49% 45% 38% 46%
Senior 57% 56% 60% 47%
Total 42% 40% 35% 30%
(Source: Sallie Mae, How America Pays For College, 2013)

YearFreshmanSophomoreJuniorSenior

Students holding credit cards (segregated by level of education)
  • Between 2010 and 2013 a decrease has been registered in the holding of credit cards by students, except in the case of Junior students.

Students Holding Credit Cards vs. Students Holding Debit Cards

Year 2010 2011 2012 2013
Students holding at least one credit card 42% 40% 35% 30%
Students holding at least one debit card N/A 82% 80% 77%
Students Holding Credit Cards vs. Students Holding Debit Cards
  • Despite the decrease registered in the case of both cards types, debit cards remain by far the most popular choice in the case of American students.
  • The decline in credit card use in 2013 was predominantly seen in freshmen students, with only 14% owning a credit card, compared with the 21% who owned one in 2012 and 23% in 2010.
    (Source: Sallie Mae, How America Pays For College, 2013)
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Our content is intended for general educational purposes and should not be relied upon as the sole basis for managing your finances. Furthermore, the materials on this website do not constitute legal advice and should not be relied upon as such. If you have any legal questions, please consult an attorney. Please let us know if you have any questions or suggestions.