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DALLAS – TNB Card Services, the credit card division of credit union owned Town North Bank, helped MasterCard International develop one of the promotional programs the firm is using to roll out its new MasterCard Family Account cards. The new cards allow a cardholder to designate sub-accounts, with their own account numbers, that family members can use to build their own credit history and manage on their own. “Beginning in August 2002 we worked with MasterCard to develop the specific version of this product for the association to market to its employees,” said Julia Nicole, vice president of product development for TNB. As part of that development TNB became very familiar with the product and has had very good response from the credit unions it has approached about it, Nicole said. TNB has approached between 30 and 50 of its credit union members about the product, she added. MasterCard and TNB believe the new card will appeal especially to families that want to educate their children about financial literacy and encourage their growth into financial responsibility. Unlike conventional accounts that only allow cardholders to issue family members second or third cards, attached to the same account, Family Account cardholders will be able to act almost like credit account managers, MasterCard explained. They will be able to set the spending limits of the sub-accounts, allow the sub-account holder to receive and pay their own invoices and, if the sub-account holders keep their sub-accounts current, actually “spin-off” the accounts into completely independent accounts in their own right. “We were very attracted to the financial education and training aspects of this card product,” said Harriet May, CEO of the $800 million Government Employees Credit Union (GECU), based in El Paso, Texas. GECU will roll the product out to its members in early March, after processing details are finalized with TNB, May said. GECU liked the flexibility the account offered. May used an example of a family that might have a 16 year-old that the parents might allow to have one of the sub-accounts. Initially, the parent might simply pay the bill and set the limit, May said, but then, when the child is 18, the parent might up the limit and allow the child to start paying the sub-account’s bill. Then, maybe when the child is a junior in college, the parent might agree to allow the child to have the account completely independent of the parent’s account. The card both speaks to the educational needs of the member and helps further build the member’s relationship with the credit union, she said. “We are in the Southwest,” she said, “and down here connections and relationship are very much a part of the overall culture. This card fits very well with that.” The issuing institution will like the card because of this relationship factor, but also because it allows them to develop new card accounts, Nicole said. “Instead of having one family member with an account, the financial institution, in effect, could have four or five accounts. The cards will help build card usage as well as account acquisition,” she said. MasterCard’s research about the cards indicated that a high percentage of consumers liked some of its specific aspects. Eighty-two percent of the consumers MasterCard surveyed liked the security of being able to give their family members their own credit cards, the association said. Nicole said consumers were particularly pleased to be able to change the limits for the sub-accounts immediately, if emergencies or other needs arise. “MasterCard is committed to building business for our member financial institutions through the creation of innovative payment solutions,” said Randall Wheeler, senior vice president for customer solutions for MasterCard. “The MasterCard Family Account gives our member financial institutions an edge in responding to the diverse payment needs facing today’s ultra-busy families,” he said. Nicole agreed with Wheeler and said that TNB regarded the new card as a powerful tool in its arsenal of products that credit unions can use to build their card portfolios and keep their card relationships with their members strong. May echoed this as well, explaining that after she had given her daughter a credit card to get her started building credit her daughter had been so grateful for her trust and responsibility that she remained very loyal to the credit union’s card, even after she left home. “It really meant a lot to her,” May noted. [email protected]

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