Nellie Mae, the nation's largest provider of student loans, recently released a study which found that college students are carrying fewer credit cards and using them less than in previous years.  &nbspThe; study found that 76% of undergraduates carried credit cards in 2004, down from 83% at the time of their last survey in 2001.

College students carried an average of four credit cards last year.  &nbspTheir; balances averaged $2,169, which was down from $2,327 in 2001 and $2,748 in 2000, but higher than the 1998 average of $1,879.

Eileen Alt Powell, AP Business Writer, reported that according to Marie O'Malley, Vice President at Nellie Mae, the positive news can be attributed to consumer efforts:


cardbenefitsBack in 2000 and 2001, people were shocked at what was going on in the undergraduate community.  &nbspThere; were calls for legislation, banning credit card vendors on campus...and a strong push for more financial education. We'd like to think some of that (education) is sinking in.


The Nellie Mae survey indicates that college students are now using credit more responsibly than in years past.

  • More than half of the undergraduates surveyed carry credit card balances below $1,000.
  • Charges for educational expenses were most often textbooks and general school supplies, while their non-educational charges involved food, clothing, cosmetics and gifts.
  • Credit card balances were paid in full in each month by more than one in five students.

However, the study found that two thirds of the undergraduates only make minimum payments on some or all of their credit cards and 11% say that they can't even pay the minimum.  &nbspO;'Malley finds this statistic disturbing:


cardbenefitsThat 11%, that's a population we need to zero in on, to find out what's going on.  &nbspThey;'re maybe not making their payments because they can't, and that's a problem.


As expected, credit card debt increased by grade level, according to the study.  &nbspFreshmen; and sophomores carried an average credit card debt of $1,580 while juniors carried $2,000 and seniors, $2,864.

Two thirds of the students worked while in college, although they also took on student loans.  &nbspSeniors; were expected to graduate with an average of $28,953 in debt - $26,089 of it in student loans and $2,864 on credit cards.  &nbspIn; 2001, the average debt among seniors was $20,402 with $2,185 on credit cards.

This latest study found that over half of the students got their first credit card at age 18 but some waited until the age of 21. 26% were referred to a certain credit card company by their parents, 35% responded to a direct mail solicitation from a credit card company and 18% signed up at a card vendor's booth on campus.  &nbspOthers; responded to a telephone solicitation or applied online.

There has been a nationwide push recently to improve financial literacy among students.  &nbspCatherine; Williams, a credit expert with Money Management International, expresses guarded optimism about this trend:


cardbenefitsPerhaps there is a generation emerging from college that is building a foundation for longer-term savings.  &nbspBut; let's see if these numbers hold in the future.


Please visit our Student Credit Card Debt Survival Guide for helpful related consumer information.  &nbspWe; also welcome your comments about credit card debt in our popular credit forum!