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MOST STUDENTS ARE RESPONSIBLE FOR THEIR OWN CARDS
- Most students surveyed (69%) obtained credit cards in their own names, while the others (31%) said that their parents either paid their primary credit card bills or co-signed at least one of their cards. Of those who obtained cards in their own names, only 15% reported holding a full-time job when they applied.
- Thirty-eight percent (38%) of the students responsible for their own cards report paying their balance off each month. Thirty-six percent (36%) pay ãas much as they can.ä However, the remaining students responsible for their own bills -- more than a quarter of the total -- report that they pay either the minimum only (16%) or pay late (9%).
- Overall, students responsible for their own cards had average unpaid balances of $968, however students who reported carrying over a balance had unpaid balances of $1,366.
CREDIT CARD MARKETING ON CAMPUS:
- More than half of students (61%) responsible for their own bills reported they had obtained cards at campus tables while fewer than half of those who reported that their parents helped with payments (41%) obtained cards at tables.
- Students reported obtaining gifts ranging from T-shirts and Frisbees to coffee mugs, slinkees, and candy or bottles of soda in return for filling out applications at tables. Students reported that campus groups sponsoring the tables often received either flat fees or ãper-application completedä payments from the credit card companies as well.
STUDENTS WHO OBTAINED CARDS AT CAMPUS TABLES HAD MORE CARDS AND HIGHER BALANCES THAN THOSE WHO HAD NOT.
- Students responsible for their own cards who obtained cards at campus tables had more cards (2.6) than those who had not (2.1) and higher unpaid balances ($1039) than those who had not ($854).
- More students responsible for their own cards who obtained cards at campus tables reported carrying unpaid balances (42%) than those who had not (35%)
- Those students responsible for their own cards who obtained cards at campus tables and carried balances had higher unpaid balances ($1460) than those who had not ($1206).
PAYING LATE AND TAKING CASH ADVANCES
- More than one quarter of all students (28%) reported paying late at least once in the last two years. This finding is especially troubling since many banks now extract "penalty" interest rates of 22-28% from consumers who make 1-2 late payments in a year.
CREDIT CARD EDUCATION INADEQUATE
- Only 41% of all students found credit card education materials "helpful" or "somewhat helpful." The remainder found them not helpful or unreadable. Some students were harshly critical of ãsmall printä and ãdeceptive legalese.ä Other students stated that telephone calls to or from credit card companies were only to obtain payment or aggressively sell add-on credit life insurance, not to offer advice on paying down debts.
- Over one-quarter of students (26%) found introductory "teaser rates" misleading.
- The survey asked students how long it would take to pay off a $1,000 credit card debt at an 18% Annual Percentage Rate (APR), if you only paid the minimum balance due. Using a generous 3% minimum payment (most credit cards require less) only 20% of all students guessed the correct answer, six years. The most common answer was 10 years (37%). An additional 19% guessed 8 years and 15% guessed 4 years. In addition to the $1000 paid off, the student would also pay $559 in interest. A $2500 debt could take 34 years to pay off, with total payments of over $10,000, including over $7500 in interest.
USE OF CARDS
- While 79% of all students reported using credit cards for multiple purposes, from campus expenses to shopping, only 13% reported limiting credit card use to emergencies.
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