Students More Concerned About Credit Scores

[Aug 17, 2007.]

It appears that college students are more concerned these days with maintaining good credit scores.

Celent, a consulting firm, has been watching the financial habits of Americans born between the years 1982 and 2000, also known as Generation Y. In an online poll conducted in May, Celent surveyed the financial behavior of nearly 600 university students representing 34 institutions of higher learning. The students ranged in age from 18 to 25.

The students ranked good credit as their number one financial goal-tied with being able to meet incidental living expenses, such as books and pizza. Celent credited the responses to educational efforts that have been aimed at informing young people of the hazards that poor credit represents.

The survey also showed that nearly 70% of students have a credit card, while 20% intend to possess one within the next 2 years. Debit card use is also up-89% of those polled said they have a debit card now. However, prepaid cards do not appear to be in much demand-only 10% said they use prepaid cards and only 10% said they expect to have one in the coming 2 years.

It appears that students are following a national trend, relying heavily on credit cards and debit cards to make their purchases. Consumers are increasingly reliant on plastic because of its many security benefits - benefits that are just not possible when one is paying with cash. Because members of Generation Y are also quite technologically savvy, they may be more inclined to use electronic payments rather than rely on cash or check transactions.

However, the survey results clearly indicate that students are recognizing the pitfalls of high credit card balances. They realize that it can be next to impossible to pay large credit card bills when one is juggling student loan and car.

Julie Ann Amos
August 17th 2007

Recent News

• Concern Rises About Predatory Lending in Mortgage Industry
  Presidential candidate Hillary Rodham Clinton is expressing concerns about shady mortgage lenders who practice predatory lending. Senator Clinton is also requesting a $1 billion government fund that would enable homeowners to avoid the hardship of foreclosure. [15th August 2007]


• New Report Suggests Changes in the Credit Card Industry
  The report by the National Consumer Law Center is particularly critical of the industry's impact on older Americans who may be on a fixed income and therefore unable to deal with large credit card debt.[15th August 2007]


• Credit Card Companies Under More Scrutiny
  The Fed also wants credit card issuers to give consumers more notice when they're about to raise rates. Currently, issuers give consumers 15 days' notice. The Federal Reserve Board wants that expanded to 45 days. [15th August 2007]


• Wall Street Hit By Housing Slump
  There are new fears that the housing crisis that has been gripping the country could have reverberations on Wall Street, the symbol of America's economic health and vitality.[13th August 2007]


• Housing Slump Likely to Continue
  Financial forecasters say the current housing slump is likely to continue in the near term.[13th August 2007]