Are College Students Becoming More Responsible with Credit Cards?

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College students have always had a reputation for having difficulty with their credit cards. As young adults with little experience managing their personal finances, college students are often prone to overspending and incurring debt. In fact, these problems were behind the CARD Act of 2009, which placed limits on the extension of credit to adults under 21.

But in more recent years, it's possible that the latest generation college students are becoming more responsible with their credit cards then the nation's credit card users as a whole. In a recent survey by Equifax, one of the three major consumer credit bureaus, over 70 percent of college aged credit card users reported paying their entire statement balance in each month. This compares favorably to Gallup's most recent survey in 2014 that found that only 48 percent of respondents always paying the full amount.

Trends with Credit Card Users in College

Ahead of the back-to-school season, Equifax commissioned a blind survey of more than 600 American college students between the ages of 18 to 24, sometimes referred to as Generation Z. While the survey found that just 43 percent of respondents had actually checked their credit scores, 62 percent reported knowing how to receive a free copy of their credit reports.

"We're talking about a generation that has subtle, but meaningful differences from its Millennial predecessors," said Melanie Wing, vice president of Customer Insights at Equifax. "We wanted to peer inside this consumer group, understand their relationship with credit, and attempt to prevent what we're seeing with Millennials – many of whom are plagued with record levels of student loan debt and an inability to successfully achieve their financial goals."

"We saw this survey as the beginning of a unique opportunity Equifax has to help Generation Z understand how credit works, and the long-term impact it can have with life milestones such as renting a home, buying a car, and getting a job," she added.

The survey also found that the majority of college students who had credit cards were actively using them for a variety of purchases, and only 16 percent said that they relegated credit card usage to emergencies only. Furthermore, 59 percent of those who do not pay off credit card balances each month indicated that they plan to do so within a year.

What's Going On?

While the survey results didn't delve into the underlying causes of the findings, we can speculate on the possibilities. Following the financial crisis that began in 2008, Americans become more averse to credit, debt and financial risk. But as time has passed and the economy has improved, credit cards are no longer seen as damaging as they once were. The behavior of the newest generation of college students seems to indicate that young adults are willing to use credit cards, but are committed to using them responsibly.

In fact, it may be time that we reconsider the notion of the irresponsible young adult getting into trouble with credit cards. If the results of this survey are correct, it may be that college students are, on average, more responsible with their credit cards than the rest of us.

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