Page 25 - Payne Research Center ~ Money Matters

P A YN E C E N T E R . OR G
These findings also underscore the importance of using data from previous research to inform the development of financial education programs. By understanding the trends and patterns of credit card usage among college students, educators and policymakers can design more effective interventions that target the specific needs and challenges of this population. This evidence-based approach can help to ensure that financial education programs are relevant, engaging, and impactful.
The prevalence of credit card debt among Financial Well-Being survey participants may be higher than reported: a discrepancy was found between students’ reported credit card usage and their self-identified debt. When asked about their credit card payment habits, 62% of students indicated they have credit card debt that they are paying. However, in response to a separate question about the types of debt they carry, only 23% identified “credit card debt.” This discrepancy may be due to social desirability bias, where students underreported carrying credit card debt when asked directly. This may also be indicative of a disconnect in what students consider to be credit card debt.
This finding highlights the importance of using multiple methods of data collection and triangulation to obtain a more accurate picture of students’ financial realities. Future research could incorporate additional data sources, such as credit reports or financial records, to verify students’ self-reported debt levels. Additionally, researchers could use techniques such as randomized response questions or implicit association tests to reduce the impact of social desirability bias.
High credit card balances can lead to significant long-term costs for students. Peterson and Comoreanu (2024) reported that in Q3 2024, college students held an average credit card balance of $2,060. At an average Annual Percentage Rate (APR) of 24.43% for new credit card offers (Schulz & Shepard, 2024), it would cost a student $5,699 to pay off a $2,060 balance over 202 months, assuming no other credit card charges or penalties. These findings emphasize the importance of responsible credit card usage and timely repayment to avoid high costs and accumulating unnecessary debt.
PAGE 16