Consumer Payment Card News

Conservative Students

A new study by NJ-based Student Monitor indicates traditional goals of a solid marriage, good friends and prudent personal financial management are tops among todays college crowd. The report also shows 60% of students use ATM cards, 40% use credit cards and 25% use telephone calling cards, on a weekly basis. VISA released more results of its Scholars & Cents study yesterday which showed that 94% of college students recognize the importance of establishing a good credit rating. VISA said that while their study confirms that students are responsible users of credit, the association is going forward with plans this fall to launch a two-tiered education program for college students. VISA also released Top Ten Tips for First Semester Finances yesterday. Meanwhile MasterCard kicked off an national advertising campaign this month, via MTV and magazines, to warn college students of the dangers of poor credit card management.

Marketers courting the college student market are reviewing marketing strategies based on the just-released Student Monitor, a national study of student attitudes and activities.

According to Student Monitor, traditional goals appear to be reemerging. Students report placing as much importance on a solid marriage and good friends as they place on having a fulfilling career.

Marketers hoping to reach students need to consider their media habits — while students consume general audience print and broadcast media, their unique schedules, preferences and the distractions they face mean that traditional media might not get the whole job done. Student lifestyle demands targeted messages that speak to students’ interests and concerns. General advertising in general media cannot generally speak directly to students.

Students report $6.7 billion in discretionary spending, (nearly $150 per student). Students spend wisely with the interest and mobility to shop for a variety of products, shopping wherever selection and value are best. Students spend self-generated funds — most students report working during the school year, nearly 90% work during the summer months, nearly 60% work during Winter Break.

Nearly 60% of students used an ATM card and more than 40% made a purchase with a credit card within the last week. Nearly 80% of the students report making at least 1 long distance telephone call within the last week with 25% of students using a telephone calling card to place long distance calls.

Students are early adopters of new technologies. More than 80% used a computer within the last week. Coupled with their nearly universal and low cost access to the Internet, students are among the most “Net-active” consumers. The study reports that nearly nine in ten students accessed the Web during the past semester and more than one third did so on at least a daily basis. Most students appear to use the Web for e-mail communications and to do academic-related research.

Fast food meets the needs of college students with 75% eating at a fast- food restaurant in the last week. Whether students live in dorms, off campus, fast food is a part of their weekly diet. They take advantage of the many entertainment options available on or near campus. Within the last week, 34% went to a movie off campus, 33% rented a video and 30% attended a campus (non-sports related) event. More than 25% watched a daytime soap opera, (slightly more than the 22% viewing a prime time soap).

Half report reading a book within the last week not required as a part of coursework (welcome news to both parents and publishers alike). They also report reading more than six magazines at least occasionally.

Running and swimming are the most popular sports activities students undertake on their own. Basketball and football are the most popular team activities.

The study confirms students’ high level of consumer activity, media consumption and readiness for new experiences. Clearly, companies who wonder where their new customers will be found need look no further than the campus.

National Visa Study Confirms That College Students Are Responsible Users of Credit
While the record number of personal bankruptcies this year has highlighted Americans’ financial illiteracy, today’s college students say they make the grade when it comes to managing expenditures against their incomes. According to the Visa Scholars & Cents study, a full 90 percent of college students rate their approach to handling personal financial matters as good or excellent.
“Based on their track records with the college market, Visa and its member banks have long regarded students as responsible users of credit, and this new study confirms that the vast majority of college students keep their spending in line with their income and pay their bills on time,” said Bob Couch, senior vice president, Visa U.S.A.

Ninety-four percent of the students surveyed recognize the importance of establishing a good credit rating while in college. More than half (56 percent) typically pay their credit card balance in full each month. By comparison, according to industry statistics, only 40 percent of cardholders pay their balance in full each month.*

While college students receive financial assistance from parents and other relatives (42 percent), more than 67 percent also rely on money they earn during the school year. Half of the students surveyed work during the school year, with 60 percent working over 20 hours per week and 66 percent earning at least $100 per week. In addition, many students (52 percent) rely on income from summer jobs to cover school-year expenses.

College students use a variety of payment tools to manage their finances, selecting checks, cash or credit cards depending on the expense. In general, the survey found that students use checks to pay for tuition (54 percent) and housing (57 percent), while relying on cash for groceries (42 percent) and entertainment expenses, such as going to the movies or restaurants (81 percent). Credit cards, according to the students surveyed, are reserved for high-ticket items such as travel (47 percent) and car expenses (44 percent), and emergencies (70 percent).

“While most college students are managing their finances well, we recognize that education in credit management is critical for responsible credit use — especially among young adults,” said Couch. “To respond to this need, Visa U.S.A, and its member banks are launching a two-tiered education program this fall. The initiative, designed to provide young consumers with the tools they need to manage their finances responsibly, includes a money management education curriculum for freshmen orientation leaders and a national campus outreach.”

The Visa Scholars & Cents study, a national telephone survey, was conducted by NFO Research, Inc. of Greenwich, Connecticut, between July 22 and July 27, 1997. The survey polled 251 college students who attended college on a full-time or part-time basis during the 1996-1997 school year and had a major credit card in their own name or were an authorized user of their parents’ credit card.

Visa is the preferred payment brand and the largest consumer payment system worldwide. It plays a pivotal role in advancing new payment products and technologies to benefit its 21,000 member financial institutions, their cardholders, and the global economy. Visa is the only consumer payment system to facilitate $1 trillion worth of purchases of goods and services in a fiscal year. Visa’s nearly 600 million cards are accepted at more than 14 million worldwide locations, including 370,000 ATMs in the Visa/PLUS Global ATM Network. Visa’s Internet address is

* Industry statistic provided by Credit Card Management Magazine.

Top Ten Tips for First Semester Finances

1. Know where you stand. Buy a small ledger and track how much you spend in the first few months. Keep your receipts and go through all your bills. Make sure you know how much you have saved and how much you owe.

2. Create a budget you can live with. Make sure it’s realistic. Budget so that you can pay off your debts and also include an amount for savings. If you want to travel during spring break, start saving for it now.

3. If it looks like it’s too good to be true, it probably is. Your mail box is going to be stuffed with all kinds of offers. The companies that offer you 10 bestsellers for a $1 or 14 CDs for $5 also expect you to pay for shipping and handling and additional orders in the next 12 months. Make sure you read all of the fine print before you send in your order.

4. Don’t buy everything now. You may be tempted to get everything right away. Before you raid the campus store, make a list of your immediate needs and then buy them at a discount store — it’s less expensive and you will not buy more than you need.

5. Look before you leap. Before going to school, see if your campus has a computer center — you may not need to buy your own computer. Wait to see if your roommate has one and is willing to share. The same goes for a refrigerator. Look into renting one. That way you will not have to worry about repairs or summer storage.

6. Consider carefully. There are many credit card offers out there — and they all offer different features. Before you sign up for a credit card, make sure you understand all of the terms. What is the annual percentage rate? Are there any finance charges? Is there an application fee? Is there a charge for cash advances? Know what you’re signing up for.

7. Create an identity for yourself. When choosing a PIN (personal identification number), be careful not to choose numbers that can be easily decoded, such as your birth date or phone number. Choosing such dates or number sequences that are easy for you to remember can be easily figured out by others through trial and error.

8. The true cost. Remember, your bank will charge you interest on the amount you owe on your credit cards. The more you owe, the higher your interest payments will be and the longer it will take you to pay off your balance.

9. Be creative. Take advantage of free on-campus activities — movies, lectures, parties, or dances — instead of going out off-campus. For special events, cook dinner for a friend, or write them a poem instead of buying an expensive present.

10. Don’t go overboard. You don’t need a whole new wardrobe — learn to borrow clothes from your stylish friends. Buy posters to decorate your room, not framed artwork or the ergonomically correct, vibrating massage chair.

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