Show College e students become 1 more financially responsible Erin Korsvall Press Release The average outstanding balance on undergraduate credit cards fell to its lowest level since 1998 according to a study released by Nellie Mae a top originator of student loans and leader in helping Students manage debt and understand understand understand under under- stand the responsibilities of bor bor- rowing The study Undergraduate Students and Credit Cards in 2004 An Analysis of Usage Rates and Trends which can be found at analyzes the credit card behavior of Nellie Mae student loan applicants during the thelast thelast tast last year While the sharp increases in credit card usage among college students that we have seen in recent years appear to be leveling off undergraduates and credit cards remain a dangerous combination combination combination combi combi- nation said Marie vice president of marketing for Nellie MaeThe MaeThe MaeThe Mae The fact that average credit card usage has declined among undergraduates undergraduates undergraduates under under- graduates in the past three years can be viewed as a sign that the message to use credit responsibly is reaching its intended audience said The results from Nellie Maes Mae's credit card studies have long begged the question as to whether there is a correlation between credit cred cred- it card usage and education expenses Seventy-four Seventy percent of undergraduates reported using credit cards for school supplies the number 1 reported use of cards the second most common usage of cards r reported ported by undergraduates was was' wasa a tie between textbooks and food with 71 percent reporting these as charged expenses While slightly less than 24 percent percent percent per per- cent reported using credit cards for tuition warns that such usage is disconcerting given that variable interest rates on credit cards average roughly 13 percent Because student loans have built- built in deferment options low often subsidized interest rates and repayment incentives for making on time payments they are a much wiser financing choice for qualified qualified qualified fied education expenses than credit cards More than third one-third of students reported working ten to 20 hours per week during the school year while percent reported working working working work work- ing more than 20 hours per week Conclusions reached in a regional region region- al breakdown of the surveys survey's results were similar to those in 2001 Students who reside in the Northeast tend to more conservative conservative conservative conserva conserva- tive with using credit cards than students in other regions of the country Midwestern and Western students have the greatest likelihood likelihood likelihood hood of owning a credit card as 82 percent own at least one card Students who reside in the Midwest have the greatest debt levels levels levels lev lev- els compared to students in other regions The average credit card is 2498 for these students half of whom have four or more more credit cards For the 2004 study as well as each of its previous studies in n 1998 2000 and 2001 Nellie Mae extracted data from the credit bureau reports for a randomly selected group of student loan Joan applicants In 2004 Nellie Mae added a survey component An online survey was sent to 1 1260 students between the ages of 18 18 and 24 attending public and private Credit Card Availability and Usage 76 percent of students in 2004 began the school year with credit cards 56 percent of students obtained their first card at the age of 18 Tl The e average number of credit cards per student was in in 2004 43 percent of students had at least four credit cards in 2004 Credit Card Debt The average outstanding balance on student credit cards was 2 2169 in 2004 23 percent of students carried a balance of over in in 2004 More than 50 percent of students carried balances less than 1000 21 percent of students pay payoff off all cards each month 44 percent of students pay more than the minimum payment but carry a balance 11 percent of students pay less than the minimum payment each month four year undergraduate institutions institutions of which roughly 10 percent responded Nellie Maes Mae's goal in publishing this his I information is to underscore the he importance of educating college college col col- I Ithe lege students about using credit effectively weighing their spending spending spend spend- 1 ing decisions and considering their J source of borrowing The key kev to J financial health for students during j school and after graduation is if being aware of what they borrow when they borrow and how much they borrow and understanding the costs and rP responsibilities associated ed cd w with all types Of borrowing including n credit Cards said t |