College Students Prefer Online Banking to Paper Checks

• By Dian Schaffhauser
• 05/23/08

According to a new survey of 1,547 college students nationwide, debit cards and online tools are the backbone of students' money management. Eleven percent reported they have never been to a physical bank to make a transaction. Seven out of 10 prefer to use a debit card when making a purchase. Only 16 percent are likely or very likely to use a credit card.

The survey was done by Higher One, a company that sells a suite of online banking services to institutions of higher education and their students. All students were enrolled in a school that makes the Higher One services available.

About two-thirds of respondents reported that they were confident in their ability to manage their own money. Students reported that they took responsibility for their own finances at an average age of 18.8 years old--about the same age that they enter college. Nearly half say they're saving at least five percent of their income and a fifth are investing in some way.

"With adulthood comes financial responsibility and temptations," said Patti Noren, director of student financial services and bursar at Dowling College on Long Island, New York. "Dowling College is building a freshmen seminar/workshop to help make our freshmen students more aware of the good and bad of credit. We want to prepare our students by educating them with information on how to balance the future and make the responsible and mature financial choices."

"This generation of students uses different tools to manage money than their parents did," said Miles Lasater, chief operating officer and co-founder of Higher One. "The fact that they're using debit cards and tracking their spending online shows they understand the core principals of budgeting."