National Survey Reveals Gaps Between Students' Perceived Credit Knowledge
And Real Financial Facts; More Credit Education Needed
NEW YORK, March 17 /PRNewswire-FirstCall/ -- According to the second
annual survey by Citi Credit-ED(R), Citi's award-winning financial literacy
program for young adults, the nation's college upperclassman today have high
financial and lifestyle expectations immediately after graduation, combined
with a hearty appetite for consumerism. Though students are extremely
optimistic, survey results show a significant disconnect between perceived and
real credit knowledge, and that credit education is still needed.
An Optimistic Financial Outlook
Results of the online Harris Interactive survey conducted by Credit-ED
reveal that today's college upperclassmen are more optimistic about the U.S.
economy than last year and for the coming year than young adults, baby boomers
and mature adults. College juniors and seniors are more optimistic about
achieving early financial independence -- despite the fact they expect no
higher salary and just a slight decrease in the amount of debt compared to
last year. The survey also finds that, after graduation, upperclassmen plan
to spend their disposable income on themselves for instant gratification buys
rather than retirement:
* About two in five (42%) upperclassmen expect to be financially secure
-- that is, afford the lifestyle they want with little debt -- within
three years after graduation, compared to a third (35%) a year ago.
* Similar to last year, about three out of five juniors and seniors today
expect to have no credit card debt upon graduation and a year after
graduation.
* 22% of upperclassmen plan to spend leftover money on entertainment or
personal items, compared to 15% last year.
* Only one in five (22%) upperclassmen plan to save or invest any money
left over after expenses, compared to 30% last year.
After graduation, many college students may encounter a different reality
when it comes to their financial situation. According to a recent Time
magazine poll, among adults aged 21-29, nearly half (46%) are concerned about
making ends meet. Only 15 percent of these adults say they are "most of the
way" to being fully independent of their parents or relatives; 20 percent are
just getting started.
Credit Knowledge and Credit-Related Behavior
While the Citi Credit-ED/Harris Interactive survey finds that the majority
(90%) of college upperclassmen today recognize and value good credit as an
important financial goal, their credit-related behavior tells a different
story:
* The majority of upperclassmen (72%) have not requested a copy of their
credit report.
* About a third (32%) have missed or been late on a credit card payment.
* A quarter (24%) have written a check that bounced.
Furthermore, most upperclassmen (80%) feel knowledgeable enough to manage
their finances after graduation, yet almost half of those who feel
knowledgeable still make significant credit mistakes, revealing that more
financial education is needed:
* Just over half (52%) believe their spending habits now will NOT impact
their credit report in the future.
* Over a third (37%) think opening unnecessary, new credit cards will NOT
lower their credit score.
* Nearly three in ten (28%) do NOT save money for future purchases.
* Nearly a quarter (22%) think using a debit card will help them build a
credit history.
"These survey findings tell us that there continues to be a gap between
students' perception vs. reality when it comes to credit and financial
knowledge," said Amer Sajed, Senior Vice President, Citi Cards. "Citi is
committed to providing ongoing comprehensive, interactive and engaging
resources so that students learn and adopt healthy credit and saving habits
early to prepare them for life after graduation and help them achieve
financial security."
Interactive Credit Education Resources
Nearly a quarter of college juniors and seniors (24%) currently feel
strongly that they need to know more about wise credit management. And this is
a good thing, since it appears college students -- especially those scheduled
to graduate within the next two years -- are going to encounter a different
future than the one they envision today.
To help students manage their finances wisely in the "real world," Citi's
Credit-ED program provides young adults with all the resources and support
they need to help ensure a healthy financial future. The Credit-ED website
just for students, http://www.Students.UseCreditWisely.com, offers a wealth of
free financial education information to spend wisely, learn the ABCs of credit
and protect themselves from fraud.
The site also features interactive tools including the Budget Builder, an
easy-to-use, step-by-step guide to creating a personalized spending and
savings plan; the Spend Wisely Challenge that assesses a student's financial
IQ; and two Use Credit Wisely and Know When to Stop mini-movies.
Recently, Citigroup and the Citigroup Foundation announced a 10-year, $200
million global financial education commitment, the formation of a new Office
of Financial Education and a global initiative designed to encourage its
300,000 employees around the world to devote time to support financial
education and other charitable causes. Under the new initiative, employees may
take a day off from work to volunteer for non-profit organizations in their
communities.
Survey Methodology
Total sample includes 1,060 U.S. college juniors and seniors at a 4-year
college or university. All interviewing was conducted on-line using The
Harris Poll Online database during January 7-19, 2005. The margin of error is
+/- 3.1 percentage points.
About Credit-ED
Credit-ED is part of Use Credit Wisely, Citi's ongoing comprehensive
credit education program that provides free financial tools to help people of
all ages, backgrounds and economic levels develop healthy credit habits. In
addition to Credit-ED, Use Credit Wisely also encompasses Hablando de Credito,
Citi's credit education program for the Hispanic community, and
http://www.Credit-EDAdministrator.com for college administrators to help guide
their students to financial "smarts".
About Citi Cards
Citi Cards, or Citi, is a member of Citigroup (NYSE: C). Citigroup, the
leading global financial services company, has some 200 million customer
accounts and does business in more than 100 countries, providing consumers,
corporations, governments and institutions with a broad range of financial
products and services, including consumer banking and credit, corporate and
investment banking, insurance, securities brokerage and asset management.
Major brand names under Citigroup's trademark red umbrella include Citibank,
CitiFinancial, Primerica, Smith Barney, Banamex, and Travelers Life and
Annuity. Additional information may be found at http://www.citigroup.com.
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