More students are using credit cards to cover college-related expenses, according to a 2009 study from Sallie Mae. The report concludes:
- Eighty-four percent of undergraduates had at least one credit card, up from 76 percent in 2004.
- The average number of cards has grown to 4.6, and half of college students had four or more cards.
- The average (mean) balance grew to $3,173, the highest in the years the study has been conducted. Median debt grew from 2004's $946 to $1,645.
Only 5% of first credit cards are actually acquired by means that require the issuer to be physically on campus. Credit unions have a real advantage over other card issuers for the "Referral from Parent" and "Searched web and applied online" categories, which together account for 35% of first cards. If a student is a member of a credit union, or eligible to become a member, it is likely through the existing membership of a parent. This makes the parent an ideal channel through which credit unions can reach the student. Further, by establishing an online relationship through internet products such as home banking and bill pay, students naturally inclined toward the online channel will likely turn to a trusted online partner first.
Now that the Credit Cardholders' Bill of Rights signed into law, students up to the age of 21 will now need the signature of a parent or guardian to acquire a credit card—except students who can independently verify they have the income to pay off the card balance. This will further enhance the credit union advantage in reaching students before other card issuers by mandating increased involvement from parents in the card selection process.