Average Credit Card Debt for a College Student

Karen Y. Larkin
Student with credit card

Perhaps people of all ages could learn a thing or two about money management from college students. On average they carry a revolving balance of $499, according to a 2013 study by Sallie Mae. This compares to an average household balance in the United States of $15,950. In 2013, students charged an average of $3,156, but 62 percent paid their balances in full each month.

Students Avoiding Credit Card Debt

Credit card use among college students is waning, according to a Washington Times report. The overall number of students with credit cards declined from 42 percent in 2010 to 35 percent in 2012. Of the students who still hold credit cards, 33 percent carry no balance. The Times points to two factors as potential reasons that fewer college students carry credit cards.

  1. Students took the Recession to heart and simply don't want to owe more money than is absolutely necessary.
  2. The Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009 was signed into law. While this new law was enacted as a measure to protect credit card holders from excess fees, it also made it more difficult for people under 21 years of age to obtain credit.

Credit Cards by Grade Level

Seniors are far more apt to hold credit cards than freshmen.

  • Only 14 percent of freshmen own credit cards in 2013, down from 21 percent in 2012.
  • Among sophomores, 27 percent own credit cards, down from 41 percent in 2010.
  • Juniors are the only group that increased credit card use, with 46 percent owning cards. This is up from 38 percent in 2012.
  • Among seniors, 47 percent own credit cards. This is down from 60 percent in 2012.

Other Demographics

The Sallie Mae report captures additional demographic information, including:

  • At 37 percent, students who live in the West are most likely to own a credit card. They are followed by Midwestern students, at 30 percent, while students in the South and Northeast own still fewer credit cards.
  • The ethnic breakdown of students carrying credit cards is 37 percent Caucasian, 24 percent African-American, and 22 percent Hispanic.
  • There is no appreciable economic difference between students who carry credit cards. Among high income students, 34 percent own credit cards, and among low income students, 32 percent carry credit cards.

Alternatives to Credit Cards

Not carrying credit cards does not necessarily mean that students are carrying less plastic. U.S. News and World Report lists other options that have become popular among college students, including:

  • Debit Cards: Purchase amounts and withdrawals come directly out of a checking account.
  • Prepaid/Gift Cards: These cards can be loaded with pre-set spending limits.
  • Bluebird Cards: These are available from Walmart and American Express, and allow parents to set up a sub-account within their own account, that students can access.
  • PayPal Debit Cards: Sometimes pay from part time jobs can be direct deposited into a PayPal account, and students can access the funds with a debit card. This is also a convenient way for parents to transfer money into a student's account.

Preparing for Life

College is a time when students gain necessary skills and experience they will rely on for the rest of their lives, and what they learn about money may be as important as what they experience in the classroom. Whether students carry credit cards or some alternative, they are developing money habits and mindsets that will be with them for years to come.

Average Credit Card Debt for a College Student