"National Credit Education Week" and "Financial Literacy for Youth Month" will get underway this month as evidence mounts that young consumers are not mastering the basics of personal finance. The American Savings Education Council's "2001 Parents, Youth & Money Survey" found that parents are falling short in their efforts to teach their sons and daughters about personal finance. Florida-based InCharge Institute of America said its study found over half of the survey respondents indicated their parents did not talk to them about the importance of a good credit rating or using credit cards responsibly. Furthermore, the JumpStart Coalition for Personal Financial Literacy found in a major survey last year, that, on average, only 51.9% of 12th graders could pass a text on basic money skills.

To assist young adults up the personal finance learning curve, CardWeb.com and Dorling Kindersley have jointly released a new, easy-to-understand book on credit management. The JumpStart Coalition is also releasing a new book entitled: "Improving Financial Literacy: What Schools and Parents Can and Cannot Do".

The new "Managing Credit" book, which is part of Dorling Kindersley's "Essential Finance" series, was co-written by CardWeb.com's CEO, Robert McKinley. The new 72-page publication covers the fundamentals of credit with sections entitled: "The Concept of Credit"; "How You Get Credit"; "Loans: The Credit Benefit"; "Credit Cards"; "Protecting Your Credit"; and "Managing Your Credit". Besides a clear, concise presentation, the book is filled with full color graphics in the Dorling Kindersley tradition. The book is available in major book stores or via CardWeb.com.

To further assist students and young consumers with financial literacy, CardWeb.com has linked up last year's national first place winning Web site: "The Credit Puzzle-How to Use It, and Not Abuse It." The top Web site was designed by then seventeen year old, Andris McKinley, son of CardWeb.com's CEO Robert McKinley, in a competition sponsored by Engelwood, Colorado-based National Endowment for Financial Education. The award winning Web site focuses on the long-term cost of bad credit versus good credit, as well as the smart use of credit cards by students.

Order the Managing Credit Book Online..Click Here

Click here for the Credit Puzzle web site

U.S. CONSOLIDATION

Another wave of consolidation is moving through the bank credit card industry. Two months after confirming its intention to exit the credit card issuing business, Wachovia announced this month the sale of its $8 billion portfolio to Bank One/First USA. Following the transaction, Bank One/First USA, will reclaim its ranking as the second largest U.S. issuer with $75 billion in receivables. The acquisition of the Wachovia card portfolio should give Bank One/First USA a badly needed shot-in-the-arm. Since the third quarter of 1998, Bank One/First USA has lost more than ten million accounts in the wake of aggressive pricing policies that produced a strong consumer backlash and a fair amount of litigation. Bank One/First USA's image has also been badly tarnished over the past 18 months among shareholders, resulting in a massacre of management. This month's acquisition of Wachovia's portfolio will add about 2.8 million active accounts to Bank One/First USA's portfolio, effectively replacing half of the issuer's recent losses in its account base. More importantly, Wachovia's pristine portfolio will add more than $8 billion to Bank One/First USA's outstandings and may immediately add as much as $100 million per year to Bank One's aftertax earnings. Combined, Bank One/First USA's new portfolio will exceed $75 billion, making it second only to Citibank. However MBNA, with about $71 billion in domestic outstandings, is not far behind.

INTERNATIONAL EXPANSION

As the U.S. bank credit card business consolidates, top issuers are trying to grow their international portfolios through acquisitions. In the past six weeks MBNA America and Citibank have snapped up sizable U.K. portfolios. Citibank agreed this month to buy Connecticut-based People's United Kingdom credit card portfolio. Citibank International PLC is acquiring People's U.K credit card operations for approximately $526 million. The portfolio has about $426 million in receivables. People's U.K. portfolio has been growing about 18% annually. People's says it wants to focus its resources on building a dominant franchise in Connecticut, expand on national lending and concentrate on the core U.S. credit card business. Last month, London-based Abbey National confirmed it is selling its credit card business to MBNA Europe for slightly more than $400 million. Under a five-year deal, Abbey will become an agent of MBNA in the UK market. Reportedly MBNA paid an 18% premium for the Abbey card portfolio. Abbey currently has about 550,000 cardholders or about a 1.3% market share in the UK. MBNA and Abbey will launch a new series of agent VISA cards by summer which will include cashback and platinum cards. MBNA launched its card products in the UK in 1993 and has built a portfolio representing about 7% of the UK market.

CONSUMER FEAR

A new poll, released this month, found that Americans who use the Internet are most fearful of Social Security and credit card numbers being stolen by criminals and believe the Internet is where their personal information is most vulnerable, followed by dishonest phone order agents. According to the survey results, 41% of the 2,951 U.S. respondents were most concerned about Social Security numbers falling into the wrong hands, followed by credit card information at 29%. These results bolster the findings of a report issued earlier this month by the Pew Internet and American Life Project, which showed that 87% of Americans surveyed were "concerned" or "very concerned" about the online theft of personal information. The results remained essentially the same across most educational and income levels, although those with a high school degree or less and those whose household income was $35,000 or lower were the least likely to trust the Internet. The poll was commissioned by Sanctum and conducted by Harris Interactive.