Undergraduate Students and Credit Cards in 2004

An Analysis of Usage Rates and Trends by Nellie Mae http://www.nelliemae.com/library/research_12.html
Published May 2005
Summary Statistics

  • Seventy-six percent of undergraduates in 2004 began the school year with credit cards. This is an 8% decrease from the 83% with cards reported in 2001.

  • The average outstanding balance on undergraduate credit cards was $2,169, a reduction of 7% from 2001 when the average balance was $2,327, and the lowest average balance reported since 1998.

  • More than half the undergraduates with credit cards carried balances lower than $1,000.

  • Undergraduates reported freshman year as the most prevalent time for obtaining credit cards, with 56% reporting having obtained their first card at the age of 18.

  • As students progress through school, credit card usage swells. Ninety-one percent of final year students have a credit card compared to 42% of freshmen. Fifty-six percent of final year students carry four or more cards while only 15% of freshmen carry that many. Final year students carry an average balance of $2,864 while freshmen carry an average balance of $1,585.

  • Undergraduates reported direct mail solicitation as the primary source for selecting a credit card vendor; the second most common source was referral from parents.

  • Seventy-four percent of undergraduates reported using credit cards for school supplies (paper, notebooks etc.), the number one reported use of cards; the second most common usage of credit cards reported by undergraduates was a tie between textbooks and food, with 71% reporting these as charged expenses. Slightly less than 24% reported using credit cards for tuition.

  • Twenty-one percent of undergraduates with credit cards reported that they pay off all cards each month; 44% say they make more than the minimum payment but generally carry forward a balance; 11% say they make less than the minimum required payment each month.

  • Students estimating their outstanding credit card balances in a survey reported lower average balances than the average credit card balance outstanding at the credit bureaus.

  • Students from the Northeast region had the lowest outstanding average balances while students from the Midwest had the highest balances.

    • Posted by Mark Rodrigues at 11/27/2006 6:14 PM
    Categories: Credit Card
     

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