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What is the Average College Student's Credit Card Debt?

Dena Standley | April 23, 2024

Dena Standley
Legal Expert, Paralegal
Dena Standley, BA

Dena Standley is a seasoned paralegal with more than 20 years of experience in legal research and writing, having received a certification as a Legal Assistant/Paralegal from Southern Technical College.

Edited by Hannah Locklear

Hannah Locklear
Editor at SoloSuit
Hannah Locklear, BA

Hannah Locklear is SoloSuit’s Marketing and Impact Manager. With an educational background in Linguistics, Spanish, and International Development from Brigham Young University, Hannah has also worked as a legal support specialist for several years.

Summary: The average college student’s credit card debt is more than $3,200, and this doesn’t come from paying tuition but from other expenses related and unrelated to college activities. College students struggling with credit card debt can use SoloSuit to respond to debt collectors.

The cost of higher education in America has increased significantly, making it harder for students to pay tuition and handle living expenses. Students often feel forced to accumulate credit card debt outside the ever-growing pile of student loans. Undoubtedly, credit cards benefit college students but can also cause serious financial hurdles if the debt isn’t managed well.

Managing credit card debt entails keeping up with the monthly payments and choosing to settle the debt if you have defaulted and want to start rebuilding your credit. This article explores the root cause of college students’ credit card debts and explains how to manage outstanding balances.

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What do college students spend their credit cards on?

College students have more than tuition, fees, and books to worry about as they go through college. That is why their credit card expenses reflect spending that takes care of basic needs and other costs they feel are essential for them to thrive. Redefining what constitutes a “necessary expense” is part of a sound financial management plan.

The figures below show that 31.5% said they use the credit card for essential purchases only, while 9.9% use it for non-essential purchases and 50.6% for both. The following table summarizes the credit card expenses and how the students use it.

College Student Credit Card Expenses
Expenses Percentage %
Online purchases 70.1
Eating out 50
Gas 44.4
Groceries 40.6
Travel 35.2
Others (alcohol, nicotine, and marijuana) 10.5
Source: College Finance

A Student Beans report reveals that the online purchases commonly made by college students are in order of importance: clothes and accessories, tech and mobile, health and beauty, study supplies and stationery, and books and magazines.

There are many reasons why college students get credit cards

When a young person enters college, they are technically an adult, and the standard expectation is that they weigh the pros and cons of things like getting a credit card. However, the statistics show a slightly different outcome because the biggest motivation for college students to get a credit card was that they just wanted one (56.7%). Other reasons are outlined in the table below.

College Student Reasons for Getting a Credit Card
Reason Percentage %
Just wanted one 56.7
Build credit 52.4
Learn good credit habits 35
Received from parents 32.8
For emergencies 23.7
Source: College Finance

You might wonder how college students choose their first credit card: 35% said their choice was based on their parent's recommendation, and the second highest determining factor was how easy it was for them to get approved. However, College Finance reports that more students are learning about the benefits they can receive with various cards, and 76.1% state that they would prefer a card with cash-back benefits.

How do college students pay their credit card bills?

Most credit card holders in the College Finance survey said they pay their credit card debt themselves. A further 21.3% said their parents take care of the debt, while 12.1% said they split the debt with their parents—only 1.3% use other means of making debt payments.

60% of college students pay their credit card debt in full every month, while 26% plan to make more than the minimum requirement to help them pay off the debt quickly. Some of the bad credit card habits that affected how effective students are at making payments and reducing the debt balance were:

  • Missing payments
  • Paying late habitually
  • Paying the minimum amount only
  • Overusing the credit card
  • Not reading the statements
  • Taking cash advances regularly
  • Buying expensive items
  • Avoiding payments by transferring balances
  • Throwing away or displacing receipts
  • Getting unnecessary credit card

Even though students knew that the worst credit card habit was failing to make monthly payments, 55.1% felt that missing payments had little to no effect on their current and future financial standing. 37.1% had missed at least one payment since they got their credit card.

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How can a college student manage credit card debt?

Credit card debt accrued during college can follow you after graduation and affect your likelihood of having an above-average credit score. A damaged credit score can result in an inability to get a loan, higher interest rates, and even impact your potential employment options.

The best approach while in college is to manage the debt by preparing a repayment plan. Here are the steps to go about making your plan:

  • Analyze your debt situation: Check your card's outstanding balance, the Annual Percentage Rate, and the minimum monthly payment. These figures will help you calculate and know how much you are expected to pay to stay current.
  • Assess your monthly cash flow: How much do you spend on essentials and non-essentials? Consider what you can do without to increase the amount you can use to pay off the debt.
  • Talk to the credit card issuer to reconsider giving you a more favorable interest rate or waive penalty charges, such as late fees.
  • Apply for a balance transfer card: This approach allows you to move your existing debt to another card with reduced or 0% interest for a specific period. The catch is you have to clear the debt within that period, or the new interest might be higher than the previous one.
  • Consider settling the debt for less than you owe: Some creditors allow you to make a settlement offer if you can show them you cannot pay the debt in full. The twist is that you must make a lump sum payment once they accept the offer.

SoloSuit can help you settle start the debt settlement conversation and settle your debt for less. To learn more about how to settle credit card debt, check out this video:

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