updated 5/24/2005 5:48:59 PM ET 2005-05-24T21:48:59

College students remain big fans of credit cards, but they're carrying fewer of them and using them less. A study released Tuesday by college lender Nellie Mae found that 76 percent of undergraduates carried credit cards in 2004, down from a peak of 83 percent in 2001, when the last survey was made.

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They carried an average of four cards last year, and their outstanding balances averaged a total of $2,169. While a seemingly hefty number, that was down from $2,327 in 2001 and $2,748 in 2000, though up from the $1,879 average balance of 1998, the study found.

"Back in 2000 and 2001, people were shocked at what was going on in the undergraduate community," said Marie O'Malley, a vice president at Nellie Mae. "There were calls for legislation, banning credit card vendors on campus ... and a strong push for more financial education.

"We'd like to think some of that (education) is sinking in."

The Nellie Mae study, which is based on data from the nation's main credit bureaus as well as a survey of students, is often used as a benchmark of the financial well-being of the nation's college students.

The latest study found that more than half of the students got their first credit card at age 18, although some waited until they were 21. Some 26 percent said they were referred to a card company by their parents, 35 percent responded to a direct mail solicitation from a card issuer and 18 percent signed up at a card vendor's booth on campus. Most of the others signed up on the Internet or responded to a telephone solicitation.

O'Malley said there were indications in the latest survey that students were using credit responsibly:

  • More than half of the undergraduates with credit cards carried balances below $1,000.
  • Their most frequent charges for education expenses were for general school supplies and textbooks, while their most frequent charges for non-education expenses involved food, clothing, cosmetics and gifts.
  • More than one in five students paid their credit card balances in full every month.

On the other hand, two-thirds of the undergraduates say they're making only minimum payments on some or all of their cards, while 11 percent say they can't pay even the minimum, the study found.

"That 11 percent, that's a population we need to zero in on, to find out what's going on," O'Malley said. "They're maybe not making their payments because they can't, and that's a problem."

The study also found, as might be expected, that credit card debt increased by grade level. Freshmen and sophomores carried average card debt of about $1,580, while juniors carried $2,000 and seniors, $2,864.

And although two-thirds of the students worked while they went to school, they also took on more student loans, the study found.

Seniors were expected to graduate with some $28,953 in debt — $26,089 of it in student loans and $2,864 on their credit cards. In 2001, a senior's average debt was $20,402, with some $2,185 on credit cards.

Catherine Williams, a credit expert with Money Management International, a Houston-based financial counseling and education agency, noted that there's been a nationwide push over the past several years to improve financial literacy among young people.

"I'd like to think the Nellie Mae numbers are an indication that's having some effect," she said.

But, she said, it was important to see whether the debt numbers improve in future surveys.

"Perhaps there is a generation emerging from college that is building a foundation for longer-term savings," Williams said. "But let's see if these numbers hold in the future."

Nellie Mae, which is based in Braintree, Mass., is a wholly owed affiliate of Sallie Mae, the nation's largest provider of student loans.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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