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HOW UNDERGRADUATESTUDENTS USE CREDIT CARDS
Sallie Mae’s National Study of Usage Rates and Trends 2009
 
How Undergraduate Students Use Credit Cards
About Sallie Mae
®
 
Sallie Mae is the nation’s leading provider o saving- and paying-or-college programs. The companymanages $180 billion in education loans and serves 10 million student and parent customers. Through itsUpromise
®
aliates, the company also manages more than $17.5 billion in 529 college-savings plans, and isa major, private source o college unding contributions in America with 10 million members and more than$475 million in member rewards. More inormation is available at
www.SallieMae.com.
About Nellie Mae
®
 
Since 1982, Nellie Mae has ocused exclusively on providing education nancing or undergraduate andgraduate students and amilies, through the Federal Family Education Loan Program and through privatelyunded loans. Nellie Mae is committed to helping students be brilliant beore, during, and ater college.Nellie Mae is a wholly-owned subsidiary o SLM Corporation, commonly known as Sallie Mae.
Sallie Mae and Champions for Higher Education are registered service marks of Sallie Mae, Inc. Nellie Mae is a registered service mark of Nellie Mae Corp. Upromiseis a registered service mark of Upromise, Inc. SLM Corporation and its subsidiaries, including Sallie Mae, Inc., are not sponsored by or agencies of the United Statesof America. Copyright ©2009 by Sallie Mae, Inc. All rights reserved. GCR1643
April 2009
2
 
kEy INDINGS
In this time o credit crunch and economic downturn, college students are reling on credit cards more thaneer beore. Nearl eer indicator measured in sring 2008 showed an increase in credit card usage since thelast stud was conducted in all 2004.
•Eighty-fourpercentofundergraduateshadatleastonecreditcard,upfrom76percentin2004,thelast
 
timethestudywasconducted.Theaveragenumberofcardshasgrownto4.6,andhalfofcollege
 students had our or more cards.
•Undergraduatesarecarryingrecord-highcreditcardbalances.Theaverage(mean)balancegrewto$3,173,thehighestintheyearsthestudyhasbeenconducted.Mediandebtgrewfrom2004’s$946
 
to$1,645.Twenty-onepercentofundergraduateshadbalancesofbetween$3,000and$7,000,also
 up rom the last study.
B ear in college, credit card usage and debt also is increasing across all categories—credit card ownershi,aerage balance, median balance, those carring an balance, and those carring high balances.
•Since2004,studentswhoarrivedoncampusasfreshmenwithacreditcardalreadyin-handhave
increased rom 23 percent to 39 percent.
•Inspringof2008,only15percentoffreshmenhadazerobalance,downdramaticallyfrom69percentin
the all o 2004. The median debt reshmen carried was $939, nearly triple the $373 in 2004.
•Seniorsgraduatedwithanaveragecreditcarddebtofmorethan$4,100,upfrom$2,900almostfour
years ago. Close to one-th o seniors carried balances greater than $7,000.
Nine in 10 undergraduates reorted aing or direct education eenses with credit cards—and the aerageamount the charged more than doubled since the last stud.
 
•Ninety-twopercentofundergraduatecreditcardholderschargedtextbooks,schoolsupplies,orother
 direct education expenses, up rom 85 percent when the study was last conducted, in 2004.
•Nearlyone-third(30%)puttuitionontheircreditcard,anincreasefrom24percentinthepreviousstudy.•Studentswhousedcreditcardstopayfordirecteducationexpensesestimatedcharging$2,200,more
 than double 2004’s average o $942.
 
•Themostcommoneducationexpenseschargedweretextbooks(76%),schoolsupplies(75%),and
 
commutercosts(54%).•Food(84%),clothing(70%),andcosmetics(69%)rankedatthetopofotherexpensescharged.
Man college students seem to use credit cards to lie beond their means—not just or conenience—andmore than three-quarters incurred fnance charges b carring a monthl balance.
•Sixtypercentexperiencedsurpriseathowhightheirbalancehadreached,and40percentsaidtheyhave
 charged items knowing they didn’t have the money to pay the bill.
•Only17percentsaidtheyregularlypaidoffallcardseachmonth,andanother1percenthadparents,
 a spouse, or other amily members paying the bill. The remaining 82 percent carried balances and thusincurred nance charges each month.
One-third o students rarel or neer discussed credit card use with arents, and nearl all undergraduateswould lie more inormation on fnancial management toics.
•Two-thirdsofsurveyrespondentssaidtheyhadfrequentlyorsometimesdiscussedcreditcardusewiththeir
 parents. The remaining one-third who had never or only rarely discussed credit cards with parents were morelikely to pay or tuition with a credit card and were more likely to be surprised at their credit card balancewhen they received the invoice.
•Eighty-fourpercentofundergraduatesindicatedtheyneededmoreeducationonnancialmanagement
 
topics.Infact,64percentwouldhavelikedtoreceiveinformationinhighschooland40percentas
 college reshmen.
How Undergraduate Students Use Credit Cards
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