More college students have to use credit cards just to cover basic living expenses. Here s what it s cos...

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Published: 2026-10-07T16:09:56.597Z • Permanent link

A recent study by the Federal Reserve found that nearly 9 out of every 10 students who use credit cards report doing so to pay for basic living expenses such as food, housing, and gas. This trend is particularly pronounced among low-income students, who are more likely to rely on credit cards to cover essential expenses. For instance, a report by the College Board found that 64% of low-income students rely on credit cards to pay for basic expenses, compared to just 34% of high-income students.

The data points to a broader issue in the US higher education system, where students are increasingly struggling to make ends meet. According to a report by the National Center for Education Statistics, the average student debt load has risen to over $31,000 per student, with many students graduating with debt that exceeds their annual salaries. The reliance on credit cards is just one symptom of this larger problem, which is exacerbated by the rising costs of higher education and the limited financial aid available to many students.

The study's findings are particularly concerning given the growing reliance on credit cards among students. A survey by the National Foundation for Credit Counseling found that 75% of students report using credit cards to pay for basic expenses, despite the risks of accumulating debt and damaging their credit scores. The lack of financial literacy and education among students is a major concern, as it can lead to a cycle of debt that is difficult to escape.

The increasing reliance on credit cards among students has significant implications for the financial services industry, as well as the broader economy. Companies such as Mastercard and Visa are already offering financial literacy programs and credit card products specifically designed for students, in an effort to promote responsible borrowing and financial management. However, more needs to be done to address the root causes of this problem, including the rising costs of higher education and the limited financial aid available to many students.

The data on student debt has major implications for research communities, as well as policy environments. A report by the Brookings Institution found that student debt has become a major drag on economic growth, as high levels of debt can limit individuals' ability to take risks and invest in their future. Policymakers are beginning to take notice, with some calling for increased funding for financial aid and other programs aimed at supporting students in their financial journeys.

The increasing reliance on credit cards among students is part of a broader pattern of financial insecurity in the US. The Great Recession of 2008 led to a significant increase in credit card debt, which has continued to rise in recent years. According to a report by the Consumer Financial Protection Bureau, credit card debt has grown by over 20% since 2010, with many Americans struggling to make ends meet.