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Fewer College Students Use Credit Cards, Most Maintain No or a Low Balance


ENHANCED ONLINE NEWS.  APRIL 24, 2013. Over the past two years, college student ownership of credit cards has declined from 42 percent (2010) to 35 percent (2012), according to research from Sallie Mae and Ipsos. Freshmen were least likely to use credit, with 21 percent having a card in their name compared to 60 percent of seniors.

Most college students exercise caution with credit cards: 33 percent of card holders had a zero balance, 42 percent had a balance of $500 or less, and just 24 percent had a balance of more than $500. Nearly one quarter (23%) of parents help pay at least a portion of their student’s credit card bill.

“College is a time for building not only book smarts but also money smarts,” said Patricia Nash Christel, vice president, Sallie Mae. “Sallie Mae is committed to providing information that helps students use credit wisely and practice savvy financial habits.”

According to recent Sallie Mae research, students are optimistic about their financial abilities as 60 percent reported they are good or excellent at managing money. In recognition of April’s Financial Literacy Month, Sallie Mae released an infographic about recent student credit card usage trends.

The company recommends the following tips to keep credit card use in check:

  • Charge only what you can afford to pay in full each month. Don’t end up paying interest on pizza and iPod downloads.
  • Pay your bill before it’s due. Don’t wait until the last minute and accidentally incur a late fee.
  • Remember that a credit card is a convenience — not a source of spending money. Ask, "do I need it, or do I want it?" If you don't need it, don't charge it.
  • Keep copies of sales slips and compare them to charges on your bill. If you suspect a mistake—or worse, identity theft—contact your card issuer immediately.
  • Don't accept increases in your credit limit. Keep it modest.