Upromise Expansion

Upromise has added Skippy Peanut Butter, Centrum multivitamins, Lehigh Valley Dairies milk products, Fisher nuts, and pasta from Muellers, R&F, Pennsylvania Dutch and Anthony’s to its college savings program. The new brands will contribute 3-5% of each participating product’s purchase price into a member’s Upromise account. The companies join thirteen other leading consumer packaged goods manufacturers already participating in the program. Upromise says families can now save on more than 2,700 items at more than 15,000 grocery and drug stores, including America’s four largest grocery chains and all CVS/pharmacy locations. More than two million families nationwide have registered for the Upromise service since it launched less than 18 months ago.

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People’s Bank

Fitch Ratings lowered the “Individual” rating for CT-based People’s Bank to ‘C’ from ‘B/C’ and revised its long-term outlook to “Negative” from “Stable”. People’s has been focused on improving asset quality in its card portfolio through stricter underwriting, improved collections tactics and marketing geared towards higher quality borrowers. Fitch expects the Bank’s growth to be slow and credit card quality to remain weak in the near to intermediate time horizon. Fitch says high operating costs and a poorly performing credit card portfolio continue to dampen the bank’s overall profitability. Asset quality trends in the credit card portfolio have shown some improvement lately, but loss levels remain elevated and higher than many other standard/prime credit card issuers. In its second quarter earnings report People’s Bank reported that its managed net charge-offs have decreased for three consecutive quarters, and managed delinquencies have declined five consecutive quarters. From the peak level in 3Q/01, managed net charge-offs improved $14.3 million, or 22%, and were $5.1 million, or 9%, lower than the first quarter of this year. Managed delinquencies declined $19 million, or 16%, from the first quarter. Net charge-offs (as a percentage of average managed loans) for credit cards were 6.91%, compared to 6.95% for 1Q/02 and 6.99% for 2Q/01. Delinquencies as a percentage of quarter-end managed loans for the credit card services segment were 3.56% compared to 3.97% for 1Q02 and 4.11% for 2Q01. Average managed loans for credit card services declined $633 million, or 18%, from 2Q01. For complete details on People’s 2Q/02 performance visit CardData ([www.carddata.com][1]).

[1]: http://www.carddata.com

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VISA Buxx

VISA’s prepaid teen card will get a big boost tonight in the “Miss Teen USA Pageant,” airing on CBS. All the delegates for the pageant received a “VISA Buxx” card preloaded with $350 and the new “Miss Teen USA” will receive a “VISA Buxx” card loaded with $2,500. The cards were issued by U.S. Bank. VISA, a major sponsor of the “Miss Teen USA” program, provided the load value. “VISA Buxx” will also be featured in a video segment describing the card’s value to teenage shoppers and their parents. VISA launched the teen card in August 2000. U.S. Bank was the first “VISA Buxx” and has issued the card to more than 25,000 teens and parents. Nationally about 100,000 teens have signed up for the product through U.S. Bank, Bank of America, First Tennessee, First Union, National City, and Wachovia. More than 11 million viewers are expected to tune in tonight. (CF Library 8/10/02)

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NCAA Mascot Contest

Capital One and ESPN have launched the “Capital One All-America Mascot Team” which will be comprised of 12 NCAA Division IA and IAA football mascots, one of which ultimately will be named the “Capital One Mascot of the Year” at the Capital One Bowl on Jan. 1. A panel of judges from Capital One, ESPN/ABC Sports and the collegiate/mascot community will select the winners in late September 2002.

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Child Porn Billing

The Attorney General for Michigan has issued cease and desist orders to six Web site billing companies, demanding that they stop facilitating the promotion and distribution of child pornography over the Internet. “BillCards,” “CardBilling,” “CCbill,” EAN Enterprises d/b/a “LancelotSecurity,” “iBill,” and “Trust-Bill” were each notified that their actions in providing access to and collecting proceeds from members on behalf of “fee-based” child pornography Web sites are in violation of Michigan law. The State’s High Tech Crime Unit headed up a five-month project called “Operation NO-Lita” to target foreign child porn Web sites that use local business partners, like such billing companies, to tap into the U.S. market.

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MasterCard U.S. Credit

MasterCard’s U.S. credit card business, based on gross dollar volume, continues to grow at a 16% annual pace, down somewhat from the 19% growth rate for the fourth quarter but up slightly from the 15% pace for 1Q/02. During the second quarter, MasterCard added 11.9 million (net) new cards to bring its U.S. credit card portfolio to 252.1 million. On an account basis, MasterCard added 8.4 million net new accounts for a total of 198.9 million at mid-year. Outstandings for MasterCard credit cards, at mid-year, were $258.8 billion, according to CardData (www.carddata.com). MasterCard noted that charge-offs were up 33% on an annual basis.

MasterCard 2Q/02 Snap Shot
(U.S. credit card only; Y/Y Change)
Purchase Volume: $93.0 billion +15% Accounts: 198.9 million +15%
Cash Volume: $28.9 billion +20% Cards: 252.1 million +16%
Purchase Trans: 1.1 billion +15% Outstandings: $258.8 billion +16%
Cash Transactions: 24 million +4% Charge-offs: $4.6 billion +33%
Source: CardData (www.carddata.com)

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Choice Hotels & Mileage Plus

Choice Hotels International and its 3,300 domestic Choice brand hotels have joined the United Airlines Mileage Plus frequent flyer program. Guests at all Comfort Inn, Comfort Suites, Quality, Sleep Inn, Clarion and MainStay Suites brand hotels in the U.S. and Caribbean earn 250 miles per eligible stay, and guests at all Econo Lodge and Rodeway Inn brand hotels in the U.S. earn 150 miles per eligible stay.

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WESTPAC & EURONET

Westpac Banking Corporation has inked a deal for Euronet Worldwide to provide Euronet ATM, debit card, and POS/merchant/telephone banking software solutions to the bank’s Pacific operations. The technology will be implemented in several new sites, including Vanuatu, Tonga, the Cook Islands, Samoa and the Solomon Islands. The agreement also includes the relicensing of the same software in the existing Fiji and Papua New Guinea sites. The project will standardize Westpac Pacific Banking’s IT and operational infrastructure across the region, and will service Westpac’s more than 500,000 customers over the seven Pacific island locations through a central contact point in Sydney, Australia.

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HUDSON

Toronto-based Hudson’s Bay Company reported that as of July 31, there were 2.9 million active customer accounts in the combined credit card portfolios for the Bay and Zellers, 1.4 million Bay
cardholders and 1.5 million Zellers cardholders. Hudson’s credit card receivables totalled $388.6 million or 15% above the same quarter one year ago. Excluding the accounting adjustment to recognize the
securitization of credit card receivables, the receivable balance at July 31 was $335.8 million or about 3% above the July 31, 2001 level and 24% below the 2001 year-end level. Delinquency (30+ days) hit 5.4% at the end of the quarter, compared to 4.9% for the second quarter of 2001. As of July 31, the average balance per active account was $418, an increase of 6.4% from last year. The average volume per active account for the quarter was $342, a 6.5% increase over 2Q/01.

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