Kimberly Vining had six friends in college who often paid for rounds of drinks and wore great clothes, and put all the expenses on their credit cards.
Six years later, she's heard that two of them are still paying on the balances. One, a social work major, whose starting salary was $15,000 a year, doesn't eat out as much or buy nearly as many clothes as she did in college.
“It was like funny money to them,” said Ms. Vining, 28, who is back in school at the University of Toledo. “They didn't realize they had to pay that back. They were having a good time, I think.”
Jonathan Hausman, a psychology major at Bowling Green State University, said he thinks of credit cards as a free service to tally and organize his purchases, and free loan for a month because he pays his balance off each time. He also gets airline discounts from his credit card.
“I think credit card companies probably expect kids my age won't pay them off right away,” he said. But most of his friends do, he added.
More than half of college students - a sharp increase from 10 years ago - have credit cards in their own names, and some students accumulate hefty balances. But experts disagree on whether students are more or less likely than other adults to pay off their credit card each month, thus avoiding finance charges.
Student Monitor, a marketing research firm in Ridgewood, N.J., said that 55 per cent of undergraduates at four-year colleges pay off their balances every month, compared with one-third of the general public. Those numbers, however, are self-reported and college students might have been reluctant to admit bad habits to interviewers, said Eric Weil, managing partner.
Pete Hisey, editor of Credit Card News, an industry newsletter based in Chicago for credit card issuers, marketers, and merchants, said a larger proportion of students than the general population do not pay off all their charges each month, but their balances are smaller.
He estimated that 70 per cent of college students carry balances in the $300 to $400 range. About 60 per cent of the general population carries a balance on credit cards, he said, and those balances tend to average $2,500.
Nellie Mae, a national student loan provider, found in a survey last year of 300 undergraduates applying for loans that 5 per cent had credit card debt exceeding $7,000. A similar survey of graduate students found that 21 per cent had credit card debt between $6,000 and $15,000, and 9 per cent were above $15,000.
Matt Calbreath, a sophomore broadcasting major at the University of Toledo, is not one of those students. He neither has nor wants a credit card.
“Personally, I don't trust myself,” said the 19-year-old from Swanton Township who has a $10-an-hour job at a call center. “I see myself racking stuff up and going `Aaahhh!'”
That's largely because he's had lots of trouble with a debit card he has had since he was a high school senior. One month he was overdrawn four times, paying a $104 penalty. Once he was overdrawn by $1, the price he paid for a soda. With the $26 overdraft penalty, that drink cost him $27.
Adrian Moore, an 18-year-old from Columbus at UT, said he doesn't have a credit card for similar reasons and tends to use cash for the $300 a month in spending money that he receives from his parents.
“It would probably be maxed out the first day I got it,” said Mr. Moore, a business administration major who does not have a job. “I spend money like it's water.”
Most students who have credit cards, however, said they are careful.
Joslin D'souza, 19, an engineering major from India, said he keeps a tally of his credit card expenditures on paper, setting his budget at $100 a month. The credit card belongs to his older brother, an engineer in Dallas, and his brother pays the bill, which usually includes groceries and a few miscellaneous items the UT sophomore purchases.
Student Monitor says 56 per cent of students have credit cards in their own names, but 82 per cent have access to a card. Some parents or relatives charge college students for those expenditures later.
Alexia Crooks, a freshman in BGSU's journalism program, said her parents pay for the meals, clothes, and gifts that she charges. If the 18-year-old buys something more expensive than usual - such as a $70 pair of shoes - she tells her parents before the statement arrives, she said.
Taylor Newell, 22, a BGSU senior from suburban Pittsburgh, said he has a credit card in his own name, but the bills are sent to his parents who in turn bill him for some expenses.
The graphic design major got the credit card before he took an art history trip to Italy last summer. Such trips are more frequent than college students took a decade ago and are part of the reason for the increase in credit cards.
“People used to go to Florida for spring break and drive down with 27 kids in a car, and now they tend to fly to Acapulco,” said Mr. Hisey, of Credit Card News.
The huge increase in Internet use, especially among young people, is another big reason. Ordering almost anything over the Internet requires a credit card or a debit card, and many college students sign on to the Internet every day.
“These kids are wired to the gills,” Mr. Hisey said.
Sarah Griesemer, a junior graphic design and photography major at BGSU, got her credit card three years ago. Now 20, she said she never carries a balance and pays all of her expenses.
But the Strongsville native has heard the crazy stories. Last December, in the office supply store where she works, she saw a college student buying everything in sight who said that her credit card debt would be wiped out by computer failures as 1999 changed to 2000.