College students may be swimming in student loan debt, but when it comes to credit cards, most of them aren’t getting in too deep.
Sallie Mae, the financial services company that offers student loans, savings plans and other products to help people finance college educations, teamed up with research firm Ipsos to find out how college students are handing credit. They’ve compiled study results into an infographic.
According to the data, between 2010 and 2012 credit card ownership by undergrads declined from 42% to 35%. The study’s authors attribute this in part to the Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009, which prohibits credit card issuers from marketing directly to students and restricts their presence on college campuses.
Who carries credit cards?
Overall, only 35% of all college students have credit cards. Debit cards are much more popular on campus, with 80% of all students reporting that they have one.
Freshmen are least likely to be packing plastic—only 21% have a credit card in their name. Slightly more sophomores (28%) and even more juniors (38%) carry credit cards. But by senior year when graduation is on the horizon, 60% of students said they had credit cards in their own name.
How much are they spending?
College is expensive, but Sallie Mae says students aren’t putting many of those costs on their credit cards—or if they are, they are paying them off each month. A third of cardholders in college kept a zero balance. Forty-two percent had average balances under $500, and just under a quarter (24%) said their credit card balance was over $500 on average.
Sallie Mae gives students these tips for keeping credit under control:
- Don’t charge more than you can pay in full each month.
- Pay the balance before it is due to avoid late fees.
- Check your statements to watch for mistakes or identity theft.
- Don’t accept an increased credit limit to avoid temptation.
The survey data is based on personal interviews conducted in 2012 with 1,600 undergraduate students ages 18 through 24. The study also includes information about how parents pay for college.