Easing Holiday Pressure

The candy corn was barely off the shelves and the Plastic Halloween pumpkins relegated to the sale bins this year when the stores were festooned with Christmas adornments.

The pressure to shop — early and often — is on.

Shoppers expect to spend a total of $1,233 this holiday season, with an average of $879 being spent on gifts, according to the 1997 American Express Retail Index guide that polled more than 800 consumers. Overall holiday spending will be up 6 percent over last year, the poll also reveals.

American Express Financial Advisors, the financial planning arm of American Express, offers consumers some tips to survive the shopping sagas — and to help your budget emerge relatively unscathed:

— It sounds basic, but create a budget and stick with it. Many people set their budget and forget to plan for the “little things” outside the realm of gifts — wrapping paper, candles, cards and the costs of entertaining family and friends.

— Start early and do your shopping in spurts, considering two to three people on your list at a time. Shopping late can lead to panic and the risk of buying anything in sight, just to get the job done. By spacing out the task, you can ponder each person on your list personally and purchase a more meaningful gift — at a more realistic price.

— Think creatively. Some parents have won raves from their kids by devising homemade “coupons” that take the place of store-bought gifts. The coupons are tied to special activities, such as playing games with Mom, a visit from Dad to your child’s school for a special program or a day set aside for the child to learn how to be taught how to ride a bike or bake bread.

— Avoid the temptation to give in to the “buy-now-no-payment-until- February” enticements. Come February, a spate of fresh bills may not be a welcome sight. (And there’s always Valentine’s Day to think about.)

— Check out the consignment shops — now a trendy passion for many Americans. You may find that otherwise expensive designer sweater, jacket, purse or scarf for just the right person who appreciates a value.

— Hate crowds? Try cruising the “information superhighway.” According to the American Express consumer poll, some 6 percent of holiday shoppers expect to shop for gifts online, twice as many as last year.

— It’s becoming quite fashionable to be savvy about investing instead of “spending.” Some financial services companies are now packaging their products in ways that attract young investors. American Express Financial Advisors offers a mutual fund as part of its “Kids, Parents and Money” program that teaches kids and parents about saving and the stock market. The minimum $50 per month investment in this savings vehicle that invests in “kid friendly” companies like McDonald’s and Disney may be a great gift from parents and/or grandparents.

— Procrastination may not be all bad. Under the right circumstances, such as when extended family members don’t get together until after the holidays, you could hit the stores for the post-holiday sales. In fact, according to the American Express poll, 36 percent of adults say they shop for gifts after the holiday to take advantage of sales or because they didn’t plan to see the recipient until after the holidays.

— Reward yourself. By taking advantage of credit card rebate and reward programs that offer points for travel and merchandise, you can add even more value to your holiday spending. And features such as Purchase Protection or Buyer’s Assurance through credit cards can protect your purchases against damage or theft and can extend the warranty. If you do decide to use credit cards, it’s always best to make more than the minimum payment each month.

American Express Financial Advisors is one of the largest financial planning and money management companies in the U.S. with assets owned or managed of more than $162 billion. Formerly known as IDS, the 103-year-old company offers a comprehensive range of financial services through more than 8,500 financial advisors nationwide.

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CompuServe’s Holiday Headquarters

CompuServe offers a simplified approach to the holidays this season: CSi’s Holiday Headquarters. A special community highlighting online areas, Holiday Headquarters lets busy professionals take care of their holiday needs.

Sponsored by Windows 95, CSi’s Holiday Headquarters lets shoppers avoid long lines and short tempers by shopping worry-free at CompuServe’s online shops. All stores support a security protocol that helps safeguard members’ credit card information. To help shoppers find the best gifts quickly, Holiday Headquarters offers a gift guide with a colorful directory of online shops stocked with presents for family, friends, clients and coworkers, and organized by categories such as “The Toy Shoppe,” “Media Corner,” “Gourmet Gifts & Baskets,” “The CompuServe Flower Shoppe by FTD” and “Gifts Under $25.”

American Greetings’ Web site, accessible from CSi’s Holiday Headquarters, offers an extensive catalog of holiday cards, where shoppers can send a personalized message or a scanned graphic image using Add-a-Photo(TM) cards. Also available are personalized onscreen wishes with downloadable Animated Greetings(TM) cards.

Simplified shopping allows busy professionals more time to explore the wealth of holiday content available at CompuServe’s CSi Holiday Headquarters. Dinner party ideas and software specials are among the many offerings designed to add enjoyment to the season.

Following are categories included in Holiday Headquarters:

* Holiday Trip Planning — Features the “Hot Deals List,” a listing of all current travel deals for CSi members; a reservations area for booking flights, renting cars or reserving lodging; and the Travel Forum, where members can discover new destinations and get tips from other travelers and travel experts.

* Movies, Music & More — Contains a comprehensive listing of the best holiday movies, classic videos, TV shows, books and magazines, and a chance to vote on the “best of 1997.”

* Holiday Fun & Traditions — Allows CSi members to take a break from holiday pressures with games, contests and conversations with friends around the globe.

* Entertainment Ideas — Provides at-home holiday ideas, including decorating advice, creative crafts, Christmas cookies and healthy holiday meals.

CSi members can access Holiday Headquarters by using the GO HOLIDAY command.

Founded in 1969, CompuServe Incorporated provides the world’s most comprehensive online/Internet access through its two brands, CSi and SPRYNET. Through CompuServe, its Japanese licensee NIFTY- Serve and its affiliates around the world, more than 5 million home and business users in more than 185 countries are connected online and to the Internet. CompuServe Network Services, a leading network integrator, provides more than 1,200 companies around the world with complete, fully integrated, Internet, Intranet, and Extranet connectivity solutions. With world headquarters in Columbus, Ohio, the CompuServe organization includes offices in the United Kingdom, Germany, France, Switzerland and the Netherlands.

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Stogie VISA

First USA and Consolidated Cigar Corp. teamed up yesterday to roll out three new platinum cards targeted at the cigar aficionado. The ‘Montecristo’, ‘H. Upmann’ and ‘Cigar Lover’s’ Platinum VISA cards will carry First USA’s flagship pricing: no annual fee; 5.9% intro rate and 13.99% long-term rate. New cardholders will receive a free pack of premium handmade cigars from the Montecristo, U. Upmann and Don Diego brand shortly after the initial card use. Other incentives include discounts on premium cigar accessories from companies such as Budd Leather, Prometheus and Bollman Hat. Consolidated has about a 25% share of the U.S. cigar market.

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Smart ATMs

NCR and CIBC are jointly testing a new smart ATM that allows consumers to check movie listings and purchase tickets using an NCR terminal. The ‘NCR Smart ATM’ will also dispense concert tickets and bus passes. NCR is also introducing a new high-tech fraud detection system incorporating special paper. NCR also unveiled this week a new 2-way video kiosk being used to provide consumers with information on Cincinnati Bell’s communication services.

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Call for Antitrust Investigation

Appearing at a Senate Banking and Insurance Committee hearing to urge support for legislation (SB 21) that would outlaw ATM surcharge fees in Pennsylvania, Sen. Leonard J. Bodack (D-Allegheny) today revealed that he was also seeking a federal antitrust probe into what he termed “a monopolistic, unfair business practice.”

In a letter to U.S. Attorney General Janet Reno, Bodack requested a Department of Justice investigation into the “anti-competitive aspect” of the ATM surcharge practice.

For more than a year, Bodack and his Allegheny County colleague, Sen. Albert V. “Bud” Belan, have been trying to secure favorable action in the Republican-controlled Senate on legislation to stop banks from charging ATM customers an extra fee when they use an ATM not owned by their own bank.

Bodack, and other ATM surcharge opponents, point out that financial institutions already are paid a network interchange fee to cover the cost of ATM service to customers whose accounts are with other institutions, and that the surcharge is an excessive “double charge,” for the same service.

Bodack, the Senate Democratic Whip, also says the ATM surcharge is being used by the largest financial institutions to stifle competition. After buying into a shared network ATM strategy over the past 20 years, hundreds of smaller community-based banks, savings institutions and credit unions are being hurt badly by the surcharge, Bodack argues. The large banks, which own the most ATMs, are using the surcharge as part of an unfair business practice to entice small bank and credit union depositors to become big bank customers, he adds.

In his letter to Reno requesting an antitrust investigation, Bodack noted that some 75 percent of an estimated 4,200 MAC ATMs in Pennsylvania are owned by just four large banks — all of which surcharge. Three of those four large banks are also equity owners of the MAC network, the predominant ATM network in Pennsylvania.

“Certainly, one would assume that a fair, free and competitive market for banking services would enable consumers to enjoy greater choices and reduced costs. Instead, since the advent of the ATM surcharge, all we’ve seen is a reduction in consumer options and ever-increasing and higher fees,” Bodack wrote.

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Delinquencies Stabilize Too

Credit card delinquencies posted its seventh consecutive month of stable performance, rising just two basis points to 3.38% in November, according to the ‘Fitch Credit Card Performance Index’. Fitch cites issuers’ proactive approach towards delinquent cardholders and tighter underwriting as key factors helping to offset the rise in bankruptcies.

Fitch Credit Card Performance Index
Month Outstand Delinq. Chrg-Off Yield MPR
Sprd
Nov 97 $161.6b 3.38% 6.64% 19.68% 15.43% 4.05%
Oct 97 $160.0b 3.36% 6.65% 18.82% 14.33% 3.80%
Sep 97 $154.4b 3.33% 6.59% 18.73% 13.98% 3.89%
Nov 96 $134.4b 3.25% 5.43% 18.10% 14.31% 4.74%
Nov 95 $ 95.9b 2.50% 4.10% 17.81% 14.17% 5.21%
Nov 94 $ 65.9b 2.00% 3.57% 18.34% 15.04% 6.23%
Nov 93 $ 51.1b 2.66% 4.44% 19.11% 14.45% 5.84%
Delinq.-60 day+ delinquency; MPR-monthly payment rate; Sprd-3 month
excess spread;

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Vehicle Tag Coming

Texas Instruments said this morning its ‘TIRIS’ vehicle tag system for wireless transactions at gasoline stations is on track and will be operational in early December. Mobil became the first company to use TI’s radio frequency identification system in the retail environment as Mobil established its ‘SpeedPass’ program. Mobil has been using a key ring tag but recently announced the vehicle tag will be available in selected markets.

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TSYS Signs BB&T

Total System Services, Inc., today announced the signing of a multi-year contract to provide credit, debit and commercial card processing for Winston Salem, N.C.- based BB&T Corporation. The bank will convert its one million accounts to TSYS’ state-of-the-art Year 2000 compliant TS2(R) Cardholder System.

TSYS President Philip W. Tomlinson said, “We appreciate the confidence BB&T has placed in us to meet its business needs and are certain that they will enjoy the benefits of our leading-edge systems and solutions. We look forward to helping them prosper in this highly competitive environment.”

TS2 is the complete rewrite of TSYS’ Cardholder System. The card processing system offers exceptional levels of service and performance beyond any application in today’s card processing domain.

“TSYS offers high quality innovative card processing services,” said Scott Qualls, senior vice president and manager of BB&T’s Revolving Credit Department, “Their addition to BB&T’s team will allow us to continue providing world-standard client service for all our bankcard and debit card clients.”

BB&T also announced its intention to move its state of issuance for bankcard and merchant businesses to Georgia. BB&T is in the process of applying with the appropriate state and federal authorities. BB&T currently operates these businesses out of North Carolina.

BB&T Corporation (NYSE: BBK), a multi-bank holding company with $27.2 billion in assets, operates 485 banking offices in 256 cities in North Carolina, South Carolina and Virginia. BB&T is a full-service commercial and retail bank that also offers additional financial services, such as insurance, investments, leasing and trust. More information on BB&T is available at the bank’s website, .

Headquartered in Columbus, Ga., TSYS is one of the world’s largest credit, debit, commercial and private-label card processing companies, serving card issuing institutions located throughout the United States, Puerto Rico, Canada and Mexico, representing more than 91 million cardholder accounts. TSYS provides a comprehensive on-line system of data processing services marketed as THE TOTAL SYSTEM(R). In 1996, TSYS formed a joint venture with Visa(R) U.S.A. to create Vital Processing Services L.L.C. (), a leading full-service merchant processing company. TSYS’ 1996 revenues totaled $311.6 million; the company is an 80.7 percent owned subsidiary of Synovus Financial Corp. (NYSE: SNV)(), a $9.0 billion asset, multi- financial services company that also includes 34 banking affiliates in four Southeastern states, a full-service brokerage firm, a comprehensive trust services provider and a mortgage services company. TSYS’ Internet address is .

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Genus Holiday Hotline

As consumers head off to the malls the day after Thanksgiving, kicking off the biggest shopping season of the year, Genus Credit Management today launches its automated Holiday Hotline. The interactive, strictly confidential Holiday Hotline 888-GENUS 12, is a valuable tool for shoppers looking to devise affordable budgets for holiday purchases.

Without a smart budget or a workshop of Santa’s elves to make gift giving affordable, holiday spending can often times lead many Americans into debt. To help consumers spend wisely during this season of giving, the 24-hour hotline will help consumers develop an effective spending plan based on their financial income, current debt, estimated number of presents to buy, price range of these gifts, among other considerations. The hotline also offers tips on good money skills to adopt when holiday shopping and entertaining to prevent credit or debt problems. Internet users can also access the holiday budget worksheet and other useful holiday tips by visiting the Genus website at .

“Keeping holiday spending under control does not mean that you have to become a Scrooge when it comes to buying gifts for loved ones. Instead, you must simply learn how to use credit responsibly,” says Bernie Dancel, founder and CEO of Genus Credit Management, a non-profit organization that provides free debt management and education to over 40,000 consumers nationwide each month.

During last year’s holiday shopping season, 50 percent of Americans spent nearly $300 more than their intended average gift budget of $715. Swept up by the season of giving, shoppers spent 42 percent more than they anticipated. This is the type of overspending that leaves many consumers facing credit trouble into the New Year. While it may take only moments of generosity to accumulate debt, paying it off may take years. For example, it takes 23 years to pay off a $1,900 balance by making only the minimum monthly payment, according to Bankcard Holders of America.

“We encourage consumers to be conscientious about their spending limits before they shop so that they don’t find themselves overwhelmed by debt in the new year,” says Mr. Dancel. “We hope our holiday promotion attracts more consumers to seek our help in gaining better control of their financial situations before they are in serious trouble. Our new hotline is accessible to anyone, anytime of the day or night.”

Here’s a few tips from Genus Credit Management to avoid overspending during the Holidays:

— Devise a holiday spending plan. Make sure the plan includes items such as holiday dinners, entertainment and travel expenses and decorations.

— Consider where you are in your credit card’s billing cycle and make purchases in the beginning of the cycle, when you have the longest period of time before your payment is due.

— Make a gift-giving list for loved ones with the amount to be spent on each gift… and stick to it! Keep track of what you’ve spent, so if you do overspend on one gift, adjustments can be made to your list.

— Identify which of your credit cards carries the lowest interest and consider it for making holiday purchases. Calculate the card’s interest rate into the cost of the purchase to determine the affordability.

— Consider using a Smart Card or Debit Card for purchases to prevent the accumulation of debt.

— Start saving in advance to increase your cash allowance for holiday spending. For example, if you buy lunch everyday at work, brown-bag it for the next few weeks. This savings will provide the resources to buy gifts without interest and help pay off your expenses after the holidays.

Consumer debt has soared 39 percent in the last five years and now exceeds $1 trillion, according to the Consumer Credit Delinquency Bulletin. For every dollar of income earned over the past five years, consumers spend $1.10. Last year, more than 1 million consumers filed for personal bankruptcies, discharging $30 billion in consumer debt.

Based in Columbia, Md., Genus Credit Management provides confidential counseling and education about debt management to thousands of consumers each week. Through its services, Genus Credit Management aims to help consumers recognize poor credit behaviors as a preemptive way to head-off serious debt problems. Its credit counselors can provide immediate relief to individuals with debt problems, offering affordable repayment schedules for managing outstanding debt.

Genus Credit Management also offers a free Debt Management Program to help consumers manage credit wisely, overcome financial hardships and avoid bankruptcy. Through its Debt Management Program, Genus Credit Management negotiates with creditors to reduce interest and monthly payments and eliminate fees. The organization assists consumers by customizing an affordable, consistent payment process without creating additional loans.

Since 1992, the organization has grown by 300 percent annually. Currently, Genus Credit Management’s workforce totals more than 450 members. By the end of 1997, Genus Credit Management expects to employ more than 600 staff members. For more information, please contact Genus Credit Management at 800-955-0412.

Consumers can access the holiday budget worksheets and other valuable information by visiting the Genus website, at .

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Mondex Gateway Device

InterVoice, Inc. (Nasdaq: INTV), the leading global supplier of call automation systems, announced today that its Mondex Device Gateway will facilitate the remote transfer of electronic funds over common telephone lines in the most recent Mondex smartcard program, launched by Chase Manhattan Bank (NYSE: CMB) and MasterCard International. The Gateway, running on InterVoice’s OneVoice(R) platform, enables merchants to automatically deposit funds daily from their point-of-sale (POS) devices. More than 600 retailers are currently participating in the Chase Manhattan Bank pilot program with additional merchants signing on every day including many places that previously accepted only cash such as newsstands and cafes.

The New York Mondex smartcard pilot is the first implementation of Mondex POS devices on the InterVoice Device Gateway using the rollout 3109 card. Five new Mondex devices have been added to the Gateway in the pilot program and are supplied by Hypercom, IVI Ingenico, Keycorp, Schlumberger and VeriFone. This brings the number of Mondex devices supported by the InterVoice Mondex Device Gateway in worldwide pilots to 15 including home phones from Hitachi, Inventec and Nortel, as well as GPT and Nortel payphones, and POS devices from De La Rue Fortronic.

New York is the twelfth Mondex implementation using InterVoice’s Device Gateway; other countries with Mondex pilots include the UK, Canada, Hong Kong and Australia.

“Services provided by banks have expanded rapidly over the past few years and InterVoice has been a major contributor with information technology solutions which have helped revolutionize the way banks deal with their customers,” said Mike Polcyn, InterVoice’s vice president, line of business. “Mondex appears to be the first international smartcard standard benefiting the consumers, the merchants and the banks through greater convenience and lower cost of transaction than cash, credit or debit payment.”

InterVoice, Inc. is a leading global supplier of automated call processing solutions, with the number of installed systems totaling more than 9,100 in 49 countries. InterVoice systems are used in inbound and outbound call centers across virtually all industry sectors to increase revenues and customer service levels, with lower associated costs. With capacity ranging from four to thousands of ports, InterVoice systems integrate with virtually any telephone and IS environment, and are available in both customer premise equipment (CPE) and telco-compliant configurations. InterVoice, an ISO 9001 certified company, is headquartered in Dallas, Texas, USA and has representative offices in Canada, Europe, and Asia-Pacific. Company information and interactive demonstrations are available on the World Wide Web at .

About Mondex International

Mondex International grants licenses to franchisees to allow them to exploit the Mondex electronic cash technology in a given territory. Since its incorporation in 1996, Mondex has issued 29 licenses across 5 continents. Mondex is being developed by franchisees in 50 countries representing a potential market place of in excess of 3 billion people.

Mondex is the most ‘cash-like’ of the electronic smartcards which are beginning to be introduced around the world as a more efficient alternative to physical cash; for use in everyday shopping and as a future payment mechanism in a wide variety of areas such as the Internet and ‘pay-per-view’ TV.

Mondex is the only electronic cash system in the world to operate with a single global technology allowing for cross-country payments. It allows up to five different currencies to be carried on the card at any one time in separate electronic pockets.

Mondex is currently being used in 21 implementations around the world including Australia, Canada, Hong Kong, New Zealand, Philippines, UK and USA. By the end of 1997, Mondex International will have produced in excess of 1,000,000 reloadable Mondex cards; this figure is expected to rise to 5,000,000 reloadable cards by the end of 1998.

MasterCard International acquired 51% of the company in February 1997 and is adopting Mondex International’s technology as its strategic chip platform.

The following companies are also shareholders (directly or indirectly) in Mondex International: National Westminster Bank, Ulster Bank, Midland Bank, Scotiabank, Credit Union Central of Canada, The National Bank of Canada, Bank of Montreal, Canada Trust, Le Mouvement des caisses Desjardins, Toronto- Dominion Bank, Royal Bank of Canada, Canadian Imperial Bank of Commerce, The Hongkong and Shanghai Banking Corporation, Wells Fargo, AT&T, Chase Manhattan, First Chicago NBD, Australia and New Zealand Banking Group, Commonwealth Bank of Australia, National Australia Bank, Westpac Banking Corporation (Australia), ANZ Banking Group (New Zealand), Bank of New Zealand, Countrywide Banking Corporation, The National Bank of New Zealand, ASB Bank and Westpac Banking Corporation (New Zealand).

Mondex H8/3109 smartcard chip

The new H8/3109 customized smartcard chip being used features an on-board crypto co-processor, and offers 8Kbytes of EEPROM and 14Kbytes of ROM allowing for high speed numerical calculations and the longer key lengths which are required for public key algorithms, such as RSA, DSA, Zero Knowledge and others.

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TPII Used in NYC Pilot

The New York Smart Card Program launched recently on the Upper West Side of Manhattan by Citibank, Chase Manhattan, Mastercard and VISA features TPII software developed by IFS International (Nasdaq: MNYC), a worldwide leader in client server based electronic funds transfer (EFT) technology.

VISA International selected IFS to provide the software for a series of high-profile worldwide pilots involving the VISA Cash card. In the New York program, Citibank uses TPII to authorize reloads of cash and other processing functions. The basic system has been customized to enable unique capabilities for Citibank, such as special auditing facilities and enhanced log-on security features.

During the six-month project that began recently, over 600 merchants on the Upper West Side are accepting the smart card as a substitute for cash.

“This is a chance to let American consumers see the software in action,” said Frank Pascuito, IFS International Chairman. “TPII authorizes the transaction to allow the consumer to load money onto a computer chip embedded in the smart card. We think this technology will be the wave of the future.”

In addition to this project, IFS is involved with several other VISA Cash smart card pilots in Europe and Asia, including projects for Japan’s Ministry of International Trade and Industry, VISA United Kingdom and the Bankgesellschaft Berlin, the largest bank holding company in Berlin.

TPII is an EFT management system for automated teller machines (ATM), point-of-sale (POS) and voice authorization. It utilizes object-oriented software design, relational database technology and the UNIX operating system for maximum performance. It has been adapted to manage the loading of value on smart cards.

IFS is headquartered in Troy, N.Y., with offices in the United Kingdom and Singapore. E-mail: marketing@ifsintl.com. Web page: http://www.ifsintl.com. IFS securities are traded on the Nasdaq SmallCap Market: MNYC Common Stock; MNYCP Series A Convertible Preferred Stock, MNYCW Series A Convertible Preferred Stock Purchase Warrants.

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