Student Credit Card Ownership on the Decline

Student Credit Card Ownership on the Decline

March 21, 2013         Written By Natalie Rutledge

A recent study from Sallie Mae and Ipsos titled “How America Pays 2012” reveals that student credit card ownership is on the decline.

Just 35% of students owned a credit card in 2012 compared to 42% in 2010.

The data revealed that card ownership stayed the same for students from high and low income families. However, far fewer students from middle income families own a card in their name. That figure declined from 42% in 2011 to 31% in 2012.

There was also a decline in card ownership in certain classes. There was a severe drop in the percentage of sophomores owning a card, down from 41% in 2010 to 28% in 2012. Juniors also saw a drop, from 42% to 38%. On the contrary, fourth and fifth year seniors in the study saw an increase in credit card ownership, jumping up 2% and 5% respectively. The freshman population saw little change in statistics.

Card ownership increases as a student advances through college. Freshmen are the least likely to own a card–just 21% owned one in 2012–compared with 60 percent of seniors.

More than 75% of students who own a credit card maintain one in their own name.

Part of this newly-documented decline may be the result of an increase in enrollment. The National Center for Education Statistics has documented strong growth in college attendance for the past decade, putting more students in the financial pool. Granted, these students are experiencing increases in their education costs, which would logically put them at a need for credit cards. Nevertheless, they seem to show hesitance in transitioning to the plastic community.

On a positive note, How America Pays 2012 indicates that “most students keep the balances on their credit cards low.” The average outstanding balance is only $755, and the median balance is an even lower $196. One-third of students have no balance on their cards at all. Only 3% of students have $4,000 or more in credit card debt.

Perhaps this newfound credit avoidance is due in part to a tightened approval process across the market. The 2008 economic decline is still yielding financial ramifications 4-5 years later. But low balances on student credit cards show that those students who do have accounts are learning to manage them wisely. That shows promise for both the economy and the personal finance world of the future.

The information contained within this article was accurate as of March 21, 2013. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.


About Natalie Rutledge

Natalie Rutledge majored in Communications at Mississippi State University. She was in sales for a number of businesses and spent nine years working as a communications advisor to various entities. Natalie can be contacted directly at
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