Card groups offer lessons in money management.

Credit card companies are getting into the education business, prepping tomorrow's consumers for a life of saving, spending - and presumably charging.

Having concluded that teenagers accumulate precious little knowledge about conducting financial affairs, the card groups have developed programs that school systems seem to be accepting with open arms.

It can't hurt that the programs are aimed at some 17 million youngsters 15 to 19 years of age, many of whom are on the brink of receiving their first credit card offers.

Even after at least two years of college, only a little more than half of students give correct answers to questions about purchasing financial services, according to a recent survey commissioned by American Express Travel Related Services Co. and the Consumer Federation of America.

The bank card associations have taken it upon themselves to fill the void left by the lack of consumer education classes, which are required in only 27 states.

Visa U.S.A. developed "Choices and Decisions: Taking Charge of Your Life," in 1991. This fall, some 10,000 high schools in 50 states will use it.

MasterCard International introduces "Master Your Future" this fall. So far, 1,450 high schools have said they will use the educational package. Based on the initial interest, MasterCard has ordered 17,000 videos and will send a second series of promotional letters to 17,000 high schools.

American Express and the Consumer Federation are distributing a pamphlet, "Teaching Your Children How to Save and Spend," which offers financial tips for teenagers and their parents.

More than 550 Visa members have donated "Choices" kits to high schools. Bank of America, for one, kicked in $100,000 for 1,000 kits.

"It's in the banks' interest for youth to become better money managers," said Robert Sznewajs, executive vice president of Bank of America's credit card division. "It's better to learn in the classroom than in real-life situations."

Bad Examples

Many teenagers come from families who do not teach financial management, or have parents who don't handle their money well, he added.

A 1991 Visa survey of financial literacy found that half of U.S. heads of household don't set a monthly budget; 60% said they balance their checkbooks each month; and 11% said they never keep credit card receipts to reconcile their statements.

Linda Baker, Visa senior vice president of corporate relations, said the survey confirmed what Visa already knew: "There was a real lack of financial acumen."

A MasterCard survey of 378 teenagers last year, meanwhile, found that 95% wanted to learn more about managing money.

"The need is there," said Nancy Hemenway, vice president of brand development at MasterCard. "I think the industry as a whole has recognized this need."

A former teacher, Ms. Baker came up with the idea for "Choices" in 1989 after conducting an informal survey of educators and government leaders concerned about deficiencies in consumer education.

The Visa official worked with the U.S. Office of Consumer Affairs and the National Consumers League to develop the interactive multimedia program.

"It had to be something that grabbed the kids and involved them," Ms. Baker said. Although "Choices" requires a laser disc and computer, Visa said 90% of the program can be taught without the laser disc.

The learning module was created for Visa by LucasArts Entertainment Co., part of filmmaker George Lucas' empire. The program includes a teacher's guide, software, and laser disc. Each kit costs $115.

The lesson plan's 12 chapters cover decision making, budgeting, banking services, credit cards, saving, and investing. The curriculum will be updated periodically. Visa added a chapter on debit cards this fall.

|Master Your Future'

"Choices" features two popular television personalities: Alfonso Ribero of "The Fresh Prince of Bel Air" and Tracy Gold of "Growing Pains."

MasterCard developed "Master Your Future" with Careers and Colleges magazine. It was written and performed by City-Kids Foundation, a New York-based nonprofit group of young performers who will star in a television series this fall.

The program, produced by Video Placement Worldwide, consists of a teacher's guide and a 15-minute video that covers budgeting, checking and savings, credit, and credit history. It costs $22.50.

MasterCard said it chose the video format to keep the cost down and because most schools do not have the more sophisticated laser disc players.

Both card association programs cover far more than just credit cards, which pleases bankers and consumer groups.

Dauphin Deposit Corp. in Harrisburg, Pa., offers Visa's "Choices" in 46 schools. In addition to buying the kits, the bank provides guest speakers to outline the services it offers for the students. "It gives us the opportunity to meet our future customers," said Linda Romanak, who coordinates the program for the bank.

Students have more financial choices to make these days, noted Roger Cruzen, vice president, product public relations, at Great Western Bank in Chatsworth, Calf.

"Twenty years ago, there were just checking and savings and maybe a credit card," he said. Now students can put "a whole variety of things...in their financial portfolio."

The Visa program helps them "set goals and achieve them," Mr. Cruzen said. "They'll be much more informed."

Improvement Seen

The program has been working, Ms. Baker said. "Teachers have told us they see significant improvement in knowledge."

Member banks embrace it, too, as a way to increase community involvement. Visa said some banks use "Choices" to fulfill part of their Community Reinvestment Act requirements.

Stephen Szekely, vice president of Payment Systems Inc., a Tampa, Fla., research firm, said MasterCard and Visa are addressing their industry's future with these programs. Getting a credit card has become a rite of passage, he said, with three-fourths of today's youths expected to have one.

Effective education will produce more cardholders and fewer chargeoffs, Mr.. Szekely said.

"I think it's an excellent idea for the card associations," said Gerri Detweiler of Bankcard Holders of America, a consumer organization based in Herndon, Va. "It's absolutely crucial that young people get credit and financial information before they get their first piece of plastic."

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