When Basic Needs Go on Credit

For some college students, covering basic needs means taking on debt. Some put expenses such as food, housing and transportation on credit cards, and many carry unpaid balances as they manage the costs of college. New research from Trellis Strategies suggests that financial strain can follow students into the classroom, making it more difficult to focus on their studies.

The data comes from the postsecondary research and consulting firm’s 2025 Student Financial Wellness Survey, which drew more than 65,000 responses from undergraduates at 153 institutions in 23 states, including over 32,000 credit card users. It found that 54 percent of respondents reported using a credit card in 2025, up from 43 percent in 2018.

Fewer than half of student cardholders (47 percent) pay their balance in full each month, the survey showed. Among those carrying a balance, 88 percent said they worried about covering basic monthly expenses, compared with 61 percent of those who pay in full. Some 60 percent of students carrying unpaid balances also reported difficulty concentrating on schoolwork due to financial stress, compared with 43 percent of those who pay their balances in full.

Bryan Ashton, managing director at Trellis Strategies and co-author of the report, said the findings highlight the financial pressures students can face as the cost of living rises while their options for borrowing to cover expenses outside of tuition remain limited.

“We have limitations on what we can do with student loans, especially federal student loans, because of caps,” Ashton said. “But when indirect costs go up—cost of living, housing, food, transportation—we don’t really see the ability for students to increase borrowing without going to the private market. So sometimes credit cards become the one way that students can close that indirect-cost gap.”

Basic needs on credit: The report found that 88 percent of student cardholders reported using credit cards for basic needs such as food, housing and transportation.

While 75 percent of student cardholders reported paying their credit card bills on time, 14 percent said they struggled to do so. Among students who do not pay their balances in full each month, that share rises to 31 percent.

Ashton said using a credit card to pay for basic needs is not necessarily a problem. The bigger concern is what happens when students cannot pay off those expenses and begin carrying revolving debt from month to month.

“The bigger challenge is the number that are not then able to pay off that expense,” Ashton said. “As you get into these revolving credit situations, one of the concerns that we have is ‘What is the credit limit attached to these? When will we run out of that opportunity?’ And then, secondarily, the higher [annual percentage rate] that students are paying to finance those expenses during that period of time.”

Alexandra Penrose, research analyst at Trellis Strategies and co-author of the report, said financial pressures do not remain separate from students’ academic lives.

“When we struggle to fully pay off things in life, it then automatically bleeds into our academic work and studies,” Penrose said. “It’s really hard to separate financial pressures from what students are doing in school.”

Among students using credit cards for basic needs, 58 percent expressed concern about their ability to cover monthly expenses, and roughly one-third said their overall debt felt unmanageable.

As interest accumulates on unpaid credit card balances, Ashton said, students can find themselves increasingly struggling to catch up, which can take a mental toll.

“We see that with credit card utilization, too, because that interest compounds so quickly that the inability to catch up can drive some of the anxiety and depression we see in students.”

Addressing financial strain: The report notes that helping students better understand how consumer credit works, including responsible use and repayment expectations, can reduce the risk of debt accumulating to unmanageable levels.

Ashton noted that institutions often allow students to pay tuition with credit cards. While that can be a routine way for some students to finance their education, he said credit card payments can also signal financial strain. Institutions could provide students with information about credit and repayment when they choose to pay tuition by card, he said.

Colleges can also help students reduce their reliance on credit cards for basic needs by connecting them with public benefits that can offset the costs of food, housing and other necessities, he added.

“Continuing to educate on the role of interest and what it means to use credit is important and something that we’ve gotten away from on campuses over the last couple decades,” Ashton said.

Penrose said institutions can offer lower-cost alternatives to credit cards, including payment plans, while also embedding financial education into courses to help students understand how to manage their expenses.

“When students use these high-interest credit card options to pay for their educational expenses, it should be a signal for institutions that there is a need that needs to be addressed for students to successfully go through college,” Penrose said.

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