Credit Card Debt:

Students are getting Smarter

But Many Still Carrying Significant Balances The average outstanding credit card balance held by undergraduates has dropped to $2,169, the lowest level since 1998, according to a study released by Nellie Mae,* a top originator of student loans. But “…undergraduates and credit cards remain a dangerous combination,” says Marie O’ Malley, vice president of marketing for Nellie Mae.

Some findings from Nellie Mae’s 2004 study:

76% of undergraduates in 2004 began the school year with credit cards, an 8% decrease from the 83% with cards reported in 2001.

Undergraduates reported freshman year as the most prevalent time for obtaining credit cards, with 56% reporting having obtained their first card at age 18.

23% of undergraduate students carried a balance of more than $3000 in 2004, compared to 27% in 2001.

44% of students reported they make more than the minimum payment, but generally carry a balance, while 11% say they make less than the minimum required payment each month.

Parents and students beware: debt can be hazardous to your long-term wealth! The EverydayWealth tools can be especially helpful to young people who can benefit from the long-term advantages of turning credit card debt into wealth.

*The study, “Undergraduate Students and Credit Cards in 2004: An Analysis of Usage Rates and Trends,” can be found at www.nelliemae.com.