College Students and Credit: A Bad Rap?
A new study by Georgetown University contrasts with previous studies about how responsible college students are with credit. The study shows that young adults who qualify for a credit card while attending higher education have smaller balances and lower credit limits, and they use their cards less frequently than non-college young adults.
Unlike previous studies, Georgetown looked at actual account activity, rather than polling the students themselves to ask about credit responsibility. What the university found was that the difference between college students, non-college youth, and older adults as far as responsibility was minimal - 87.9 percent of student accounts are current compared to 88.4 percent of other young adults and 91.9 percent of older adults. Meanwhile, the average balance in the account of a student ($522) is about one-third the size of non-students ($1,465) and one-fourth the size of older adults ($2,342).
Copyright © 2005 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 14, No. 12, 1/05
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