The Good Life

The Good Life

• What represents the good life?– People?– Things?– Giving people things?

How is your view of the good life created?

• Family values• Media

– TV, magazines, etc.

Credit Card Brands

• American Express: 72.5 million cardholders• Visa: 150 countries & 1 billion Visa-branded cards• Discover: 50 million cardholders• MasterCard: 210 countries and territories & 749.3

million MasterCard-branded cards

My Life, My Card

• Achievers of all types choose American Express. – Robert DeNiro– Tiger Woods– Ellen DeGeneres– Laird Hamilton

Life Takes Visa

• Empower cardholders to do what they need to do, want to do and never thought possible.

• Encourage cardholders to embrace the many ways, reasons and places to pay with Visa.

• Former tagline: Visa. It's Everywhere You Want To Be.

This is Our Card

• Reflects the voice of our customers• The people featured in the advertising are not

models or famous actors. • They are our neighbors, friends, colleagues and

proud Discover cardholders.

Priceless

• Simple premise– Line 1, Price 1– Line 2, Price 2– Line 3, Price 3– Line 4, Priceless

• Combo of celebrities and real-life people

• MasterCard campaign launched in 1997

Do You Recognize this Ad?

Dinner: $30 Movie: $17 Dessert: $10

Second date with the right girl?

Priceless

Is it Priceless? The Power of Compounding Interest

The true cost of paying the minimum

Scenario: 10 dates & you would owe $570 Interest Rate: 18%

Minimum Monthly Payment: 2.5% or $14

It will take you 8 years and 1 month to pay for those 10 dates. In that time, you will pay $470.32 in interest.

You’d be 26 years old!

The True Cost of Paying the Minimum Payment

Payment Schedule: It will take you 8 years and 1 month to be rid of your debt. In that time, you will pay $470.32 in interest.

Month

Minimum Payment

Interest Paid

Principal Paid

Remaining Balance

1 $14.25 $8.55 $5.70 $564.30

2 $14.11 $8.46 $5.64 $558.66

3 $13.97 $8.38 $5.59 $553.07

4 $13.83 $8.30 $5.53 $547.54

5 $13.69 $8.21 $5.48 $542.06

6 $13.55 $8.13 $5.42 $536.64

The Credit Card Industry

• $30 billion in profits in 2003– $10 billion in fees

• MBNA’s profits were 1.5x McDonald’s profits in 2004

• Citibank more profitable than Microsoft and Wal-Mart

Market Control

• 5 companies control 65% of the market:– American Express– Bank of America– Citigroup– JPMorgan Chase– MBNA

Affinity Cards

• A credit card offered by two groups, one a financial institution and the other a non-financial institution, such as a

• College• Airline• Non-profit group