Credit Cards on College Campuses

Written by: Stefanie Marty

The use of credit cards is not only prevalent in the US households; it is also common on college campuses among students with debt and credit problems. Due to the few financial ties of college students they represent an attractive demographic to banks.

With the increasing cost of college, the use of credit cards by students gets more and more versatile. More than 50 percent of the students pay books by credit card and about 35 percent charges the credit card to pay tuition. Banks contribute a lot to this increasing use of credit cards. Since the introduction of credit cards to students in the late 1980’s banks have gotten more and more aggressive to promote the cards to college students amongst others by distributing free gifts or by negotiating credit card partnerships with colleges.

Research shows that in 1990 about half (54%) of undergraduates held at least one credit card; a number which increased to 83% in 2001. And in 2008 76% of students reported that credit cards have been marketed to them near college campuses.

Research conducted tried to find connections between the credit card use behavior and the financial knowledge. In contrast to the expectations, students with high financial knowledge had higher credit cards balances than students with lower financial knowledge. This fact together with other findings of the study shows that the use of credit cards on college campuses is of more complexity than expected. As Robb and Sharp show in their study, limiting access to cards is not the leading way for preventing students from a financial crisis. It is much more important for the students to make rational decisions.

After conducting the study of credit card attitudes of college students, Joo also suggests further research on this important and complex topic. There are different components that must be taken into consideration when evaluation someone’s credit card use behavior. The impact of components such as gender, academic major, numbers of credit cards owned, parents’ use of credit card or psychological factor is not clear. Joo insists on a good credit education which will lead to better credit card behaviors of students.


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