College upperclassmen have grown more confident about their ability to become financially secure soon after graduation, but many admit they have problems managing their credit, a survey shows.
The survey, released by Citigroup Inc. on Thursday, said 80 percent of juniors and seniors think they know enough to manage their finances. That's down from 85 percent in a similar survey a year earlier.
But upperclassmen are still as a group novices at managing money, and many graduating this month may not realize the challenges that await them.
"Survey respondents are much more optimistic than perhaps reality suggests," said Amer Sajed, a senior vice president at Citi Cards, in an interview. "College students perhaps don't have a keen sense of the kinds of expenses and responsibilities they will have after graduation."
Men are more confident than women about the economy, while women believe more strongly in the importance of good credit.
Forty-two percent of respondents, up from 35 percent a year earlier, expect to be financially secure within three years of graduation, meaning they expect to live comfortably and have little debt. Seventy-seven percent expect that financial independence within seven years, up from 75 percent.
Part of this results from upperclassmen being more confident in the U.S. economy than older people are. Forty-two percent expect it to improve within a year, compared with 29 percent to 39 percent of older age groups.
Three-quarters of those surveyed expect to work soon after graduation, with most of the rest going to graduate school. The average expected salary is $29,131, up 1 percent.
But just 57 percent expect to be able to save money after expenses, down from 64 percent. And just 22 percent expect to save or invest for retirement, down from 30 percent.
Credit card debt will be a problem for many. While 59 percent expect to graduate with none, the rest expect to average $1,950.
And managing debt is a problem, the survey showed.
While 90 percent of respondents say having good credit is important, 24 percent admit to having bounced a check, and 32 percent to having missed a credit card payment.
Just 28 percent say they have asked for copies of their credit reports, and 49 percent say their current spending habits won't affect their future credit reports.
"Lenders want customers with good credit habits and who spend responsibly," Citi Cards' Sajed said. "We tell parents and students to focus on making budgets, distinguishing between wants and needs, saving money for the future, remembering that debt is not free money, and building a good credit history."
Harris Interactive conducted the survey of 1,060 juniors and seniors at four-year colleges or universities between Jan. 7 and 19. The margin of error is plus or minus 3.1 percentage points.