Credit Cards Online Information

CONSUMER BORROWING soared to an eight-year high in July, buoyed by credit card purchases and mortgage lending, and all but eliminating any chance that the Bank of England will cut interest rates when it meets next week.

Total net lending, including home loans, rose to pounds 6.1bn from pounds 5.7bn in June. It was the biggest monthly increase since the figures were revamped in April 1993. Consumer credit, which includes bank loans and credit card debt, jumped by pounds 1.7bn in July, up from pounds 1.4bn in June, and well above forecasts of a pounds 1.3bn rise. Proof that the housing market continues to be strong was shown by home loans rising by pounds 4.5bn, the highest figure since the current measurement system was introduced in 1993.

Jeremy Hawkins, the chief UK economist at Bank of America, said: "If the UK economy is slowing it seems that no-one bothered to tell the consumer. None of this will sit well at next week's Bank of England meeting and these data must significantly dent hopes of rates coming down then."

The Bank's key lending rate is 5 per cent, one percentage point below the peak last year. The reductions have helped extend a nine- year economic expansion, which has seen unemployment dip to 3.2 per cent.

The number of approvals for house purchases also increased, rising to 111,000 - the highest level since January of 1999. With demand for mortgages remaining strong, house prices will remain buoyant and could further underpin consumer spending. The gross value of new home loans made in July surged to a record pounds 14.88bn from a revised pounds 14bn in June. That was the highest level since October 1997.

Sterling hit fresh three-week highs against the euro after the data were released, climbing to 62.63p. Gilts, however, drifted slightly lower as expectations of further interest rate cuts dimmed. The Bank of England has said it expects consumer demand to cool in the second half of the year as slower economic growth leads to higher unemployment.

An odd pairing of surveys have crossed my desk in the last few months.

One is fairly frivolous, and the other is pretty scary.

We'll start with the fun one, which asks the question, "When it comes to filing, are you a piler, filer or tosser?"

A survey conducted by organizational products company Pendaflex, based in Melville, N.Y., found that those three categories define how most U.S. employees deal with the mountains of paperwork that descend upon them every day.

The survey, based on a poll of office workers ages 18 and older, says it shows that the organizational technique you use reveals not only how clean your desk will be, but also details regarding your character.

"Pilers" were the most common office organizers, making up 48 percent of those polled, Pendaflex said in a press release.

"Apparently, the office isn't the only place they let clutter accumulate, as 59 percent describe their house as 'somewhat messy,' " the release said. "They are 'workaholics' and 'sophisticated,' but loosen up by watching their favorite sport, baseball."

Hmmm. All three reporters who work with me on the Deseret Morning News business desk fall into this category. And the one who usually has the biggest piles, Brice Wallace, happens to be a hard-working person who loves baseball. Maybe there is something to this survey.

The Pendaflex report says 38 percent of those polled are "filers." These people are described as both "conservative" and "easygoing," and they often have office management titles. "Tossers" make up the remaining 14 percent, and they have the highest probability of describing their living areas as "perfect," according to Pendaflex.

"Besides throwing around papers, 'tossers' toss hoops, with 37 percent hailing basketball as their favorite sport," the release said.

I think I'm a hybrid of the categories described here. While I do have a few small piles of stuff on my desk and around my office, I also have extensive files, and I'm always tossing items that I know I won't need. I guess that explains why I'm a workaholic who is conservative and has a management title but also likes basketball.

But enough frivolity. It's time to move on to the scary survey.

The recently released 2006 Interprise Poll on Teens and Personal Finance conducted by JA Worldwide (Junior Achievement) and The Allstate Foundation found that 10.3 percent of teens said they own credit cards. And if that isn't frightening enough, consider that the number is higher the older teens get, according to the survey of 1,474 students from 120 JA locations across the country.

"Among teens ages 13-14 only 5 percent reported owning credit cards," said a press release from JA. "Yet at age 17, the percentage of ownership climbs to 9.8 percent and then doubles again to 19.6 percent for teens 18 or older. And alarmingly, 15.7 percent of teens who own credit cards make only the minimum payment due."

Why is this scary? Well, I've got an 8-year-old daughter who is quite interested in money and how it works, but I can't imagine that she will be ready to manage a credit card in nine years, and certainly not in five.

In fact, considering Utah ranked third in the nation for bankruptcy filings last year, I would argue that many adults in this area struggle when it comes to managing credit-card debt. I know it's something that my wife and I sometimes find challenging.

Either way, I'd like to know what you think about teens and credit cards, or about the office filing habits of you and your colleagues.

Dear Bruce: I have a good credit score, which I want to maintain. I have a couple of credit cards I never use, and I would like to cancel them.

I have heard that canceling credit cards can actually have an adverse effect on your credit score. Is that true and, if so, why?

I would think reducing the number of credit cards to only those in active use, plus perhaps a backup, would be a good thing. Thanks for your help. - D.M., Encinitas, Calif.

Dear D.M.: Assuming the cards cost you nothing, meaning annual fees, I don't see any reason why you couldn't keep them and have them available. However, if you want to cancel them, by all means go ahead. Your credit score isn't going to suffer because you have decided to discontinue a business relationship, as long as there are no outstanding balances or issues.

Dear Bruce: I thought I had heard you say (at one time) that if a parent goes into a retirement (health care) home, they can't "gift" some of their money to a child so they won't have to use it all for their care. Is this the case? We don't have a lot of money, so this is important to us. - J.W., via e-mail

Dear J.W.: It is true that one can dispose of one's assets in order to avoid paying it for health care. However, there is a look- back period to be satisfied.

The current look-back period is three years. That means you have to make the gift this far in advance of any need for public support.

Dear Bruce: I have a house in another state where I lived for 10 years and have now rented for 15 years. I have depreciated it on my taxes as a rental, and it has appreciated.

I have considered selling it, but the value of this house is $120,000 above its current basis. I am about two years from retirement.

When I retire, I probably will move back to the community where my house is. Should I sell the house now, or should I wait and move back in for two years and sell it later as my primary residence? How different would the tax consequences be? - M.P., Richmond, Va.

Dear M.P.: If you sell a house now, your accountant will have to compute what your current basis is, and the difference between that, expense of sale, etc., will be the amount on which you will be taxed. If you move back into the house for two years, it will once again become your primary residence; then, if you sell it, any profit up to $250,000 will be a totally non-taxable event.

It seems to me you have hung on for this long, why not wait the extra two years, unless the house is rented for a very small amount of money. This might swing the pendulum in favor of a current sale.

Credit-card reward schemes have been getting ever skimpier over the past year, as increasing numbers of lenders have trimmed back their benefits or even axed them altogether. Last year alone, Royal Bank of Scotland, Halifax and Egg all withdrew their cash-back credit cards, while Barclaycard severed its tie with the Nectar points plan towards the end of last summer.

The cutback in reward schemes has been driven by the increased demand for interest-free offers. With 0 per cent cards now attracting the largest number s of new customers, lenders have been competing to offer ever-longer interest-free periods - often at the cost of all other types of rewards. But for the diligent credit- card user, who pays off their balance in full each month, credit- card reward schemes are still in demand. "You end up with people having four or five cards in their wallets, which they are transferring their balance across," says PatrickMuir, of Morgan Stanley's consumer banking group. "But the card at the front of the wallet tends to be the one that gives something back."

Although there are still a handful of reward cards left on the market, new research from Morgan Stanley reveals that there is now an increasing gap between the value of rewards available. Its survey of 4,000 cardholders found that the average reward claimed over the past three months by customers of its cash-back card had a monetary value of pounds 72, while the average value of rewards redeemed by American Express Nectar Card holders over the same period was just pounds 45.

Most cards now provide a very small level of reward when converted into monetary terms. Although the best cash-back cards pay as much as 2percent back on purchases, borrowers may need to spend thousands of pounds on their card before they will benefit from this kind of hand out. Such is the case with American Express's Platinum Card, which pays 2 per cent on all transactions for the rest of the year, once you have spent more thanpounds 7,500onyour card. If you spend less thanpounds 3,000on your card in a year, you will get just 0.5 per cent cash-back.

The Platinum card has a typical APR of 8.9 per cent and works well for big spenders Most other cash-back card spay 1 or 2 per cent on purchases for a limited period, before dropping back to0.5percent.MorganStanley's offers 2 per cent until August, then drops back to 1 per cent. With the exception of Amex, interest rates on cash-back cards are usually not that competitive.

If it's a points card you're after, it becomes harder to compare the monetary value of the rewards. Amex's Nectar Card gives four points for every pound spent in a shop that participates in the Nectar programme. Elsewhere, you will just earn one point per pound spent. Around 200 Nectar points roughly equates to pounds 1 -worth of rewards, which works out the same level of benefit as a 0.5 per cent cash-back card.

The best card for you depends on your spending habits. If you're a regular M&S or John Lewis customer, both of these stores offer excellent combined credit and reward cards. Both pay one point for every pound spent in store, and one point for everypounds 2 spent elsewhere. Every 500 points is worthpounds 5back in vouchers. Egg- card users get big discounts at certain internet shops, while Air miles card holders get one air mile for every pounds 20 spent. Ten air miles is roughly equivalent to pounds 1.

Robert Kenny, of money supermarket. com, the comparison website, concludes: "Unless you spend an enormous amount, the value of most existing loyalty programmes is not very good."

Reaching the top of a "best buy" table canbe the equivalent of hitting the jackpot for providers of mortgages, loans and credit cards.

Consumers hunting a hot deal often turn to these tables - found in newspapers or consumer websites and magazines - for guidance to save themselves hours of painstaking research. And being the name in the frame can make a big difference to the success or otherwise of a new financial product.

However, this desire has spawned a series of tricks to be top of the pops - from headline-grabbing introductory rates on savings accounts to low interest rates on mortgages.

These often obscure the less attractive side of the product, such as heavily restricted availability, inflated fees or bonus rates of interest that melt away after a matter of weeks. So consumers need a healthy dose of scepticism when they look at the tables - regardless of the product.

Take home loans, says Melanie Bien of broker Sav-ills Private Finance. "Lenders are in the business of making money, so if they are offering an exceptionally low rate, you can bet they are making up the difference elsewhere - usually via a higher fee."

Lenders offering the best buy rates often don't advance high percentages of the property's value, she adds, ruling out first- time buyers with small deposits. For instance, Northern

Rock has a table-topping two-year fixed rate at 3.99 per cent but it is only available up to 80 per cent loan to value (LTV). It also has a 1.5 per cent arrangement fee so only makes sense for those taking out a loan of over pounds 175,000, adds Ms Bien.

With loans of this size, the bigger fee is worth it as it is offset by the low interest rate. "There is no 'best' mortgage, only the right one for your circumstances."

Savings accounts are another area where providers can wangle their way to the top. Until recently, they could lead the tables run by financial analyst Moneyfacts - and used on these pages - by having a decent introductory offer for six months or more. But once these headline rates had fallen away, the deals were no longer so good.

Moneyfacts has now changed its tables so that there is a separate best buy chart headed, "Accounts with introductory bonuses".

The change was made after the company received emails from consumers demanding details of straightforward accounts with no hidden catches.

Moneyfacts' tables also received some unwelcome attention recently from Moneysavingexpert.com, the consumer website, after Alliance & Leicester's MoneyBack loan hit the top of Moneyfacts' tables.

Last month, the pounds 5,000 A&L loan over three years at 5.5 per cent was only a top deal for people who borrowed exactly that sum, said Moneysavingexpert.com. If you borrowed slightly more or less with loan insurance, the amount you would end up repaying increased.

The credit card industry has also come under fire, with consumer group Which? criticising providers for making it "impossible" to compare different deals.

It highlighted the following example: Cahoot's credit card has an interest rate of 11.8 per cent and seems to offer better value than HSBC at 13.9 per cent. However, if you borrowed pounds 2,800 over a year and paid your card off in full every four months, it would cost pounds 40 overall with Cahoot and pounds 38 with HSBC.

This is mainly because HSBC charges interest on

money owed from the previous month only up to the date it produces the bill. Most companies, including Cahoot, charge interest right up to the point they receive payment.

Andy White of the price-comparison website Uswitch.com says: "Customers should look at what they want from a card rather than just picking the one at the top of the table."

You've gone for a quick take-out lunch, or maybe popped into the corner convenience store for a paper and a coffee. Just as you reach the cash register comes the realization: You don't have enough cash with you, and the handwritten sign on the counter states a minimum purchase - more than your modest amount - is required to use a credit card.While the practice is common, forcing customers to make a minimum purchase before paying with plastic is expressly forbidden by three of the country's four largest credit card companies. The prohibition is spelled out in the merchant agreements businesses sign when they accept cards from San Francisco-based Visa U.S.A., and Purchase, N.Y.-based MasterCard International Inc.We do run across this, and our merchant rules prohibit it, Randa Ghnaim, a Visa spokeswoman, said. Our policy is you should be able to use the card without any discrimination whatsoever about how much you spend. The practice is also prohibited by the Discover Financial Services' network of cards.Under our policy, they can't say, 'You need to make a minimum, or maximum, purchase,' Discover spokeswoman Jennifer Kang- Born said. The same merchant agreements also forbid passing surcharges along to consumers to help cover processing fees. Merchants and government agencies can add a surcharge, though, if it meets the qualifications of a convenience fee, usually levied on non- face-to-face transactions like filing taxes.The exception is American Express. Spokeswoman Christine Elliott said the company has no policy about the practice, but does forbid merchants from singling American Express out. So if the store has a minimum purchase policy, it has to apply to all credit cards.Credit card companies have been stepping up efforts to get people to use plastic for transactions under $25. Visa, for example, rolled out a no signature required campaign to step up usage for small purchases.According to a recent study conducted by Visa of its customers, an estimated 38 percent used credit cards at least four times a week to buy small-ticket items. The most common places people used payment cards at were gas stations and restaurants. Pharmacies and convenience stores were also high on the list.But as cards are used more frequently, business owners find themselves paying higher processing fees. Maryland Retailers Association President Tom Saquella said these higher fees can eat into the bottom line of retailers.It is a big issue for retailers, he said. Every time you pay with a credit card, they in turn have to pay the credit card processor. While it is prohibited, they just feel that on a small transaction the fees eat up whatever profit there is.Businesses taking MasterCard and Visa have the transactions processed by their bank, which usually takes a percentage of the purchase as a processing fee. Visa and MasterCard then get payment from the processing banks. Discover deals directly with the businesses, but also levies a processing fee. Bruce Phillips, senior economist with the National Federation of Independent Businesses, said for small businesses this can be a sizeable cost. Phillips said it is generally accepted that most transaction fees are around 2 to 5 percent of the total purchase.There are few businesses that don't take credit cards anymore, Phillips said. Most people will roll [the cost] into the price tag some way. It's taken as a cost of doing business - a definitely annoying cost.Discover, MasterCard and Visa all request that customers who witness minimum purchase policies contact them by calling the customer service number on the back of the respective cards. Rather than take punitive action, all three of the companies deal with merchants who violate the agreement by first alerting the business about how the policy works.

Having trouble deciding whether to use a credit, debit or travel card on a trip abroad this summer?

We will make it easy for you: Remember to use your credit or debit card to make purchases and your debit card to get cash when you need it.

Both Visa and MasterCard charge currency-conversion fees on credit card purchases, and issuing banks often pass along those fees -- and tack on a surcharge. But using plastic gets you the wholesale exchange rate, which is more favorable than the retail rate you would get if you converted currency on your own or let a foreign merchant convert your purchase into dollars immediately.

In the case of a credit card, you are also protected by the Fair Credit Billing Act if you end up in a dispute with a merchant.

Of course, you can minimize fees by using the right card. HSBC, Washington Mutual and most credit unions do not add a surcharge, and some brokerages, such as UBS, waive fees for certain clients. Capital One doesn't pass on any fees, nor does it add a surcharge for purchases made abroad.

Withdrawing cash from an overseas ATM could cost $5 or more on top of the conversion fee if you use a machine that is not part of your bank's network. However, Citibank customers can withdraw cash without charge at branches in 38 countries. And HSBC offers free ATM access in 69 nations.

If you have an account at Bank of America, withdrawals are free at more than 23,000 ATMs operated by members of its Global ATM Alliance. Other banks, such as Washington Mutual and Commerce Bank, do not charge for out-of-network withdrawals, although the overseas bank may impose a fee. In the United States, account numbers are not printed on ATM receipts. But that is not necessarily true abroad, so do not throw away your receipts.

Prepaid travel cards that you can load with cash offer the security of guaranteed replacement in case they are lost or stolen, but the fees can add up. The American Express Travelers Cheque card costs $14.95; Visa's TravelMoney card is $4.95 for AAA members, and $9.95 for everyone else. Both companies charge fees to reload the card or reissue a card that has been lost.

You've gone for a quick take-out lunch, or maybe popped into the corner convenience store for a paper and a coffee. Just as you reach the cash register comes the realization: You don't have enough cash with you, and the handwritten sign on the counter states a minimum purchase - more than your modest amount - is required to use a credit card.

While the practice is common, forcing customers to make a minimum purchase before paying with plastic is expressly forbidden by three of the country's four largest credit card companies. The prohibition is spelled out in the merchant agreements businesses sign when they accept cards from San Francisco-based Visa U.S.A., and Purchase, N.Y.-based MasterCard International Inc.

We do run across this, and our merchant rules prohibit it, Randa Ghnaim, a Visa spokeswoman, said. Our policy is you should be able to use the card without any discrimination whatsoever about how much you spend.

The practice is also prohibited by the Discover Financial Services' network of cards.

Under our policy, they can't say, 'You need to make a minimum, or maximum, purchase,' Discover spokeswoman Jennifer Kang-Born said.

The same merchant agreements also forbid passing surcharges along to consumers to help cover processing fees. Merchants and government agencies can add a surcharge, though, if it meets the qualifications of a convenience fee, usually levied on non-face-to-face transactions like filing taxes.

The exception is American Express. Spokeswoman Christine Elliott said the company has no policy about the practice, but does forbid merchants from singling American Express out. So if the store has a minimum purchase policy, it has to apply to all credit cards.

Credit card companies have been stepping up efforts to get people to use plastic for transactions under $25. Visa, for example, rolled out a no signature required campaign to step up usage for small purchases.

According to a recent study conducted by Visa of its customers, an estimated 38 percent used credit cards at least four times a week to buy small-ticket items. The most common places people used payment cards at were gas stations and restaurants. Pharmacies and convenience stores were also high on the list.

But as cards are used more frequently, business owners find themselves paying higher processing fees. Maryland Retailers Association President Tom Saquella said these higher fees can eat into the bottom line of retailers.

It is a big issue for retailers, he said. Every time you pay with a credit card, they in turn have to pay the credit card processor. While it is prohibited, they just feel that on a small transaction the fees eat up whatever profit there is.

Businesses taking MasterCard and Visa have the transactions processed by their bank, which usually takes a percentage of the purchase as a processing fee. Visa and MasterCard then get payment from the processing banks. Discover deals directly with the businesses, but also levies a processing fee.

Bruce Phillips, senior economist with the National Federation of Independent Businesses, said for small businesses this can be a sizeable cost. Phillips said it is generally accepted that most transaction fees are around 2 to 5 percent of the total purchase.

There are few businesses that don't take credit cards anymore, Phillips said. Most people will roll [the cost] into the price tag some way. It's taken as a cost of doing business - a definitely annoying cost.

Discover, MasterCard and Visa all request that customers who witness minimum purchase policies contact them by calling the customer service number on the back of the respective cards. Rather than take punitive action, all three of the companies deal with merchants who violate the agreement by first alerting the business about how the policy works.

E-commerce has only just begun and already everyone is talking about m-commerce. What is it exactly? And who can benefit?

The South African Department of Communications would like to see Johannesburg's street-traders armed with a new weapon against theft: the mobile phone. Under a pilot scheme, tourists will be able to pay street-sellers for traditional African artifacts via a mobile handset. Either the trader will slot a customer's smart credit card into a mobile phone-cum-smart-card reader, or the tourist will perform a money transfer to the trader's bank account.

Doing away with the need to carry wads of cash in a city rife with crime is just one of the more practical sides of mobile commerce. Just like e-commerce, m-commerce is the buying and selling of goods across public telecommunications networks.

Indeed m-commerce is likely to complement, rather than replace, e-commerce systems already in place. Businesses, for example, may provide secure mobile links to existing e-commerce sites.

There are, however, some key differences. Whereas e-commerce bridges distance and enables companies to display and sell wares cheaply to consumers and other businesses round the world, one of the selling points of m-commerce will be proximity.

The mobile industry is setting much store by location-based services, such as finding a restaurant, buying electronic train tickets and advertising shops as subscribers approach them.

Constant companion

Mobile phones travel most places with the subscriber and, thanks to the SIM card, they can easily become electronic wallets. The SIM card, or microchip, in the back of every phone serves to identify the operator, the location of the phone and often the subscriber.

By the end of 2010, "m-commerce will be the second biggest industry behind healthcare," claims Risto Perttunen, head of McKinsey's global wireless group in Helsinki. The remark underlines the enormous impact analysts expect m-commerce to have on consumer and business purchasing.

Even if the growth of m-commerce does not meet analysts' forecasts, m-commerce is much better placed to impregnate the average consumer's daily life than e-commerce.

Mobile phones are cheaper, easier to use and more prevalent than PCs. The Gartner Group, an IT and telecom research company, forecasts that mobile phone calls will account for 40% of the links to e-commerce systems by 2003 and estimates that mobile phone users already outnumber fixed Internet users by more than two to one.

in addition, for developing countries, building mobile networks is the cheapest and fastest way to provide people with a phone line. Also, mobile phones come with built-in payment systems, so there is no need for bank accounts to set up direct debits. Indeed pre-paid SIM cards already act as electronic purses, albeit with micro-purchases limited to minutes of telephone conversation.

It is therefore not much of a stretch to employ a pre-paid card as a debit card for small purchases. A phone turned debit card might be particularly useful in those countries where credit card uptake is comparatively low, but pre-paid mobile phone usage is high. This is the case not just for developing countries; Italy's high growth in mobile phone usage owes much to the prepaid system. In many countries, pre-paid services draw in customers who fail credit checks required to set up monthly mobile phone subscriptions.

Operators could also offer a credit system by adding online purchases to their customers' monthly bills. Since the SIM card can identify the customer, it provides a degree of security which is not available for consumers performing e-commerce over a PC.

It comes as little surprise that mobile operators around Europe are greeting m-commerce enthusiastically.

Half-man, half-phone?

As Telecom Italia Mobile (TIM) points out, a SIM card is fast becoming capable of storing not only phone credits or subscriber identity information, but also serving as a credit and debit card, a driving licence and a health card, all rolled into one.

The average mobile phone customer may feel queasy about storing so much data on a microchip controlled by a mobile operator, especially as dot.coms have already come under fire for gathering customer information to sell.

Yet TIM is one of many operators hoping to offset falling voice call revenues, with revenues from m-- commerce. The Italian operator expects 15% of its revenues to come from mobile commerce between 2002-2004, compared to 5% between 2000 and 2001.

So far TIM has introduced a commerce application for buying and selling securities in Milan, New York, Paris and Frankfurt and hopes to see its customers using mobile phones to pay utility bills and transfer money.

Other early mobile commerce applications under development around Europe include micropayments for cinema tickets and newspapers, as well as online gambling.

Over 1000 students at 3 college campuses in the Northeast were surveyed. The sample was evenly divided by gender Eighty percent of the sample was traditional students. The original sample was reduced to 260 students having at least one credit card and was classified into groups as high or low academic performers. The groups did not differ in terms of the number of credit cards and outstanding balances; however, they differed significantly in the level of anxiety felt from carrying debt, perceived need to work, and perceived impact of employment on academic performance.

Much has been written in the popular press on credit card usage and spending patterns of American college students (Blair, 1997; Fine, 1999; Leon, 1998; Lynn, 1998; Murdy, 1995; Newton, 1998; Susswein, 1995). The proliferation of credit cards and their ease of acquisition ensure that college students today have more opportunities for making credit purchases than any prior generations of college students (Schor, 1998). Indeed, college campuses have become one of the most common sites for undergraduates with no credit history to sometimes acquire multiple credit cards. College officials and consumer advocacy groups have increasingly voiced their concerns about the effect that unlimited access to credit card spending may have on college student performance (Gordon, 1999; Hitti, 2000). Specifically, they have argued that the enhanced spending opportunities available through easy access to credit cards is likely to increase students' need to work extended hours to pay off outstanding balances, which could adversely affect academic performance (Grazier, 1998).

Many college administrators believe that credit card ownership encourages students to become consumers too early, at a time when they should be more appropriately engaged in academic pursuits. Lehigh University, for example, has banned credit card marketing on its campus because of its belief that credit cards create financial pressures for college students that negatively impact academic performance (Geraghty, 1996). Parks (1999) reported that college administrators perceived that credit card usage leads to depression and dropping out.

Predictably, financial institutions that actively market credit cards to college students take an opposing viewpoint and have suggested that college students are more sophisticated consumers than they actually are. These financial institutions further have contended that the majority of college students use credit cards responsibly, leaving college with reasonable credit card balances (Institute for Higher Education Policy, 1998). These institutions are highly motivated to "capture" these young consumers while still in college, as their research verifies that early customers tend to be lifelong customers (Vickers, 1999). Financial institutions have actively sought opportunities to work in partnership with colleges across the country to gain access to these thousands of prospective customers.

Many colleges hold an ambivalent attitude toward credit card solicitation on their campuses. Although many campus officials have decried the potential for excessive consumerism that unrestricted access to credit cards offers their students, they also have stood to reap significant financial rewards through working in partnership with the institutions issuing credit cards. Colleges routinely have allowed credit card banks to set up tables in student unions and other high-traffic areas and to promote social events sponsored by the colleges. At The Pennsylvania State University, for example, any student calling to register for classes over the telephone has had to first listen to a taped advertisement from a bank followed by an option to sign up for the card over the telephone.

As mirrored in the context of the larger society, the popularity of credit cards is beyond dispute. Credit cards have financed billions of dollars in purchases annually. Fueling this "possession obsession" is a prevailing culture of materialism, the availability of credit to all facets of society, and the lack of stigma attached to debt accumulation (Pinto, Parente, & Palmer, 2000). Students often acquire credit cards and become knowledgeable in their use prior to matriculating at their universities (Hitti, 2000). Indeed, one could reasonably argue that the current generation of college students is the first that has grown up having open access to credit and being comfortable in its use (Ritzer, 1995). How they choose to use credit cards (i.e., their spending patterns) therefore becomes an important issue in more fully understanding the effect that credit card usage can have on college students.

One aspect of any examination of college students' credit card activity is their roles as members of Generation Y (Y'ers), individuals born from 1977 to 1998 whose parents were born during the baby boom or Generation X (Von Bergen, 1998). This emerging market has been highlighted by the media and aggressively courted by marketers.

The Fiserv CBS Worldwide unit of Fiserv, Inc. (Nasdaq:FISV) introduced its global credit card software, MetaCard(TM), at the Lafferty Cards and Payments Conference in Amsterdam. Fiserv demonstrated MetaCard's ability to balance credit card risk while growing profits, providing industry experts their first glimpse of the software. MetaCard software is not available in the United States.

Alex Groenendyk, President, Fiserv CBS Worldwide, said credit cards represent a significant revenue opportunity for financial institutions, and MetaCard offers a cost-effective way to help those institutions capture that market.

"Credit card portfolios are one of the best performing assets for an issuer, often producing a 25 percent to 50 percent return on investment," he said. "The investment we've made in MetaCard is part of our ongoing approach to providing clients with comprehensive solutions that help them keep a leading position in their markets."

A 20-year veteran of the credit card industry and a Vice President at Fiserv, Carol Cowan leads the MetaCard team, and said MetaCard's robust features and flexibility are unique in the market.

"MetaCard's ability to launch virtually any product, track fulfillment and monitor fraud means financial institutions will no longer have to sacrifice growing profits for the sake of managing risk."

Cowan spoke at the Lafferty conference and described best practices in managing credit card fraud, an issue that increases financial institutions' expenses 1 percent to 7 percent every year and directly impacts profitability.

In 2001, Fiserv CBS Worldwide strategically entered the credit card industry by purchasing the hard and soft assets of a proven credit card system. Fiserv combined its retail banking expertise with the knowledge capital from the acquisition to develop a global solution, MetaCard.

MetaCard manages all facets of a credit card program through issuer and acquirer functions, fraud alert, loyalty programs and authorizations. MetaCard is available as fully integrated or modular software for multi-bank and multi-product processing, allowing financial institutions to grow their presence in the credit card market cost effectively and at their own pace.

With features such as private-label processing, major purchase plans, transaction-based pricing and full card issuance, MetaCard issuer functionality allows financial institutions the flexibility to be creative with their credit card products. MetaCard also allows multiple loyalty programs to work with both the issuer and acquirer modules. The fraud alert and authorizations modules are rules-based systems designed to give the institution maximum control of risk management.

MetaCard's client/server architecture offers a Windows-based interface with the performance, stability and cost effectiveness of the iSeries platform.

Fiserv CBS Worldwide is a unit of Fiserv, Inc. that delivers end-to-end business and technology solutions for financial institutions. Through its offices in Orlando, London, Singapore, Beijing, Warsaw, and Bogota, Fiserv CBS Worldwide enables more than 200 financial institutions to deliver core processing and personalized customer relationship management solutions and servicing through multiple channels.

The Texas Rangers hope to boost sales of hot dogs and beer this summer with swipe-free credit-card terminals. Credit-card sales are accounting for about 10 to 12 percent of concession sales so far, which club officials consider a success.

"It's easier for the fans, it's quicker for the fans and people will probably spend more money," said Brad Alberts, a sales vice president for the Rangers.

The concession-stand terminals are part of Chase Bank's effort to expand the use of contactless cards that don't need to be swiped through a reader, just held near the device. Scott Rau, a Chase senior vice president, said contactless cards can shave 30 seconds off the time it takes to make a cash transaction.

To boost local interest in the new card, Chase issued one with the Rangers' logo. Users who run up $1,000 in charges get a Rangers cap, and those who spend $100,000 earn a two-game trip for two to the team's spring-training games.

A SECURITY van driver who delivered internal mail for some of Ireland's leading banks has been arrested and charged in connection with the theft of credit cards.

The man was arrested while driving a van for a sub-contractor.

Tralee-based Kelly Transport has a contract with DX Ireland to deliver internal mail from the individual banks' headquarters in Dublin to local branches.

A source claimed the man was arrested on the Limerick road on his way from Kerry to Dublin two weeks ago.

He said: "The drivers carry all the cheques and credit cards around in pouches - and deliver them to local banks at night.

"They put them into a secure letter drop box.

"Any new credit cards or Laser cards are sent to the local branches of banks .

"Then the customers either come and collect them or they are posted out in the local mail."

Dublin-based company DX Ireland sub-contract some of the internal bank mail delivery work to Kelly Transport which covers counties Kerry, Cork, Waterford and Limerick.

The DX Ireland contract is with Bank of Ireland, National Irish Bank, AIB, Ulster Bank and First Active.

A DX Ireland spokesman confirmed a driver is being investigated by detectives after a shopkeeper alleged someone was using a credit card suspiciously.

A company spokesman said: "DX Ireland can confirm an employee of a subcontractor was arrested and charged with possession of stolen property.

"DX Ireland is taking this incident very seriously and apologises for any inconve-nience caused to the affected customers.

"The collection and delivery of mail is undertaken by a network of local courier companies, most of which have been working for DX for many years."

The spokesman said the driver is no longer an employee of Kelly Transport.

"DX Ireland delivers over 40,000 items of business mail a day - and is committed to achieving high standards of service and the performance of couriers is constantly monitored.

"The individual in question is being prosecuted - it is not appropriate for the company to comment further."

A spokesman for Kelly Transport, based in Tralee, Co. Kerry, refused to comment on the arrest.

He said: "I have been told not to make any comment by my lawyer either way while criminal proceedings are under way."

CREDIT CARDS have some unexpected hidden merits One of these is a general statutory protection clause.

Some cards have purchase protection schemes. Make a purchase with your card and the product is insured against theft, loss or breakage for a certain period, providing it is not covered elsewhere. This can be extremely useful, especially for more valuable items that have yet to be added to your home contents cover. Most claims are for sunglasses and clothes. If you have this cover, remember to claim in the event of loss.

Another form of cover is travel accident insurance. This is not an alternative to holiday cover, as it only pays out in the event of injury or death while travelling when the fare or hire of a vehicle has been paid with the card. Claims are rare.

However, by law, every credit card has a superb form of cover. This is provided by section 75 (s75) of the 1974 Consumer Credit Act, and states that if a person has a claim for misrepresentation or breach of contract against a supplier of goods or services costing pounds 100 or more, but not exceeding pounds 30,000, and the transaction has been financed in whole, or part, by an agreement regulated by the Act, then the supplier and the creditor are jointly and severally liable.

As the Act regulates agreements for personal unsecured borrowing up to pounds 25,000, the majority of credit cards are caught by s75. Anyone who uses a personal credit card to pay for goods and services that are not provided, or not as described, can seek redress from the supplier, credit card company, or both. The claim can also include consequential damages.

The majority of claims relate to instances when a supplier has gone out of business. When Land Travel, a company offering coach holidays to the Continent went bust, the credit card companies received about 20,000 separate claims and paid out pounds 3.6m. All claims were met. Customers, who had paid any part of their holiday from Land Travel with a credit card, were encouraged to claim from their credit card company.

When there is a disagreement over a transaction involving a supplier that is still in business, credit card companies first ask their customers to attempt to obtain satisfaction from the supplier. If this fails, they will then take up the matter. On average, 20,000 cases are dealt with each year and pounds 20m is paid out.

(Standard & Poor's)--U.S. credit card losses have not come back down after the 2001 recession and could go much higher if the economy slides back, according to a commentary released recently by Standard & Poor's Ratings Services. Moreover, the Iraq war has consumers and their lenders nervous and, in the near term, the war could send oil prices up while further terror attacks on the U.S. could damage consumer confidence. According to the report, titled "War Woes for U.S. Credit Cards," consumer spending has recovered from its post-Sept. 11, 2001 drop, but employment is down sharply and the only real driver for the economy is federal spending. The economy has lost two million jobs since early 2001, which should also inhibit consumer spending, the article said.

"With the unemployment rate still creeping higher, charge-offs are likely to rise further before finally falling later next year," said David Wyss, Standard & Poor's Chief Economist and co-author of the commentary. "March may remain the monthly peak because of the concentration of losses, but charge-offs will remain above 7% in early 2003. Losses will then gradually slide back below 7%." Consumer confidence fell to a new nine-year low in February, the report says. The fear of war, weak stock prices, and two years of falling employment have scared consumers. Moreover, consumers cannot spend much more than they already do. During the 1990s, the stock market was doing the saving for them. This was especially true of baby-boomers approaching retirement. Suddenly, those retirement funds look much less lush and early retirements are being postponed. With the unemployment rate rising above 7%, the pressure on personal finances would push the charge-off rates to new highs (above 8%) this year, according to the report. As the war winds down and oil prices revert to normal, the economy will rebound, easing pressure on consumer finances in 2004 and 2005.

The article "War Woes for U.S. Credit Cards" is available on RatingsDirect, Standard & Poor's Web-based credit analysis system. The article is also available on Standard & Poor's Web site at http://www2.standardandpoors.com. Go to "Fixed Income," under "Browse by Sector" choose "Structured Finance" and, under Commentary & News, click on "More" and scroll down to the desired article, dated April 10.

Standard & Poor's, a division of The McGraw-Hill Companies, provides widely recognized financial data, analytical research and investment and credit opinions to the global capital markets. With more than 5,000 employees located in 19 countries, Standard & Poor's is an integral part of the global financial infrastructure.