The average college student is carrying more than $3,000 in credit card debt on at least four credit card. This shocking statistic comes from a report released by Sallie Mae, one of the nation's largest student loan providers. The report also shows that:
- 84% of college students have a credit card
- The average number of credit cards is 4.6
- Half of students have 4 or more credit cards
- 21% have a balance between $3,000 and $7,000!
- 19% of college seniors have balances above $7,000
- Only 11% of students have a $0 balance
- 80% have been surprised at their balances
- 68% have made a purchase knowing they didn't have the money to pay the bill
- 92% say they've used their card to pay for a college expense not covered by financial aid, mostly textbooks and school supplies
Education expenses aren't the only thing students are using their credit cards to pay for. They're also using their cards to pay for food, clothes, and cosmetics.
Although 67% of freshman students carried a credit card (compared to 90% of juniors and 88% of seniors), in 2004, only 42% of freshmen students had a credit card. That's a 60% increase. Most college students with credit cards got their credit card either before entering college (39%) or during their freshman year (36%).
Credit card companies have come under fire for their presence on college campuses, but when asked how they chose their first credit card, only 5% of students said from a vendor on campus. Thirty-eight percent (38%) chose their credit card from a mail solicitation. Another 19% got a referral from a parent.
While senior students currently carry the highest average credit card debt at $4,138, freshmen students aren't far behind at an average $2,038. At that rate, current freshmen are could see credit card balances at $8,000 or more by the time they graduate college.
There are many alarming statistics in the report, but perhaps the most alarming is that 35% of students say they don't talk to their parents about credit cards. These students were more often surprised at their card credit card balances after receiving their statements. Even if it's not from a parent, credit education is important before using a credit card.
If you're a college student just starting out with credit, here are 8 tips to help you manage your credit cards.