Credit Cards Are Confusing College Students, April 2016 Survey Results

Credit Cards Are Confusing College Students, April 2016 Survey Results

A recent survey was conducted to test the knowledge of college students on their knowledge of credit cards. The aim was to gauge college student knowledge on interest rates, credit card use, and other basics.

This April survey covered three different college campuses.  Two public colleges and one private college were visited; two were situated in the Bay Area with the other on the East Coast.  A total of 468 students were surveyed with the intention to test their knowledge of credit cards.

One of the first questions on the survey asks if you have a credit card in your own name; surprisingly, less than half of the sample answered yes with 38.46% claiming to be card holders.  Right away this survey reveals the lack of credit card holders in college.  The next part of the survey focused on the knowledge of those who answered yes to this question.

Several questions were asked about interest rates, late payment penalties, and over-balance fees.  The results to these questions were not too promising.  Out of all the cardholders, only 28.89% knew the over-balance fee on their card and 20.56% knew the late payment fee.  Even less knew the interest rate on their card; only 9.44% could remember their interest rate.  These questions reveal the lack of familiarity students have with credit card basics.

One question focused on spending with the credit card; more specifically, it focused on knowledge of spending limits and balance amounts.  When asked about their balance limit, 58.89% claimed to know the limit on their card.  While over half, this is still a somewhat low percentage.  Of that same group, 67.78% admitted to having a balance on their card.  When asked about the balance amount on their card, 93.33% answered yes to knowing their balance.  While some do not know their balance limits, most of them understand to keep track of their expenses.

Several questions were asked to the group that did not have a credit card, and these questions explored why these students did not have one to their name.

The first question asked if they would consider opening an account in their name.  To this question, 43.75% replied that they have considered opening an account in their name.  Although less than half of them consider getting a card, 71.53% of students understand how important credit cards are for building credit. 

Since many of them understand how important credit building is, the next question sought out the reason that so few consider opening an account.  When asked if they were afraid of accumulating credit card debt, 46.53% of them claimed to be worried about the prospect.

Although almost three quarters of the students understood the importance of building credit, less than half of them consider getting a card, but less than half of them are apprehensive of accruing debt.  Maybe college students are simply confused about how credit cards work if debt is not the main issue. 

Credit cards are instrumental in building good credit which is crucial when making life changing decisions, but, based off this sample, many of them do not even consider getting a card.  Possibly lack of knowledge on certain aspects of a card such as interest rates and penalty fees is the issue.  If this were the case, then credit card education may go a long way to increasing the number of kids in college with a credit card.

Read the full results of the survey here: https://lendedu.com/blog/college-student-credit-card-survey/