College Students More Dependent on Credit Cards Than Ever

The economic downturn has most Americans tightening their spending habits, but not all. College students are even more dependent upon credit cards, according to a survey conducted by Sallie Mae, the nation's leading provider of student loans. The organization released its survey results last week in its National Study of Usage Rates and Trends. The study focused on undergraduate students ages 18 to 24 who were enrolled in public and private four-year colleges and universities during the spring of 2008.

Sallie Mae found that 84 percent of these students had at least one credit card, up from 76 percent in 2004, the last year the study was conducted.

In addition, these college students are carrying record-high credit card balances with the average balance growing to $3,173, the highest in the decade the study has been conducted -- and in the midst of a recession, according to the survey.

According to the Sallie Mae survey, a student's credit card spending limit depends on their grade level in college. The median debt freshmen carried was $939, while in 2004 it was $373. The undergraduate’s debt nearly tripled. The findings show college seniors are carrying even higher credit card debts, averaging more than $4,100, up from $2,900 in 2004.

About 82 percent of college undergraduates carry balances that incur finance charges each month, according to the Sallie Mae report, while only 1% relies on parents, a spouse or other family member to help pay their bill.

About 92 percent of the students surveyed charged textbooks, school supplies or other direct educational expenses. This is an increase from 85 percent compared to the survey taken 4 years ago. Food, clothing, and cosmetics ranked at the top of other expenses that are charged by undergraduate students.

Written By Kim Phan at: www.bestcreditcards.us