Teens, Money, Payment Cards and Financial Services in the U.S.

• Introduction
  • Scope of Report
  • Report Methodology
  
  
• Teen Attitudes and Demographics
  • Teens Understand the Power of Money
  • Most Teens Want to Be Rich
  • Teen Financial Market Represents Big $ Opportunity
  • A Large and Culturally Diverse Group
  • Figure 1-1: Share of Teen Population by Segment, Age 12-14 vs. Age 15-17, 2007 (percent of U.S. children age 12-17)
  • Many Teens Have Paying Jobs
  • Teens in Affluent Households More Careful About Money
  
  
• Teen Shopping and Spending
  • Understanding What Teens Do with Their Money
  • Teens Crave Clothing, Music, Technology
  • Figure 1-2: What Teens Spend Their Money On, 2007 (percent of U.S. children age 12-17)
  • Most Teen Households Have Video Game Equipment
  • Teens Eat Out Often
  • Spending, Savings Cues Come from Parents
  • Discount Stores Top Shopping Destinations
  • Teens Shop Internet for Family, Selves
  
  
• Teens and Payment Cards
  • A Major Opportunity
  • Figure 1-3: Percentage of Teens with Payment Cards by Type, 2007 (U.S. children age 12-17)
  • Credit and Debit Cards Make Parents Nervous
  • Gift Cards Make for Fun Introduction to Paying with Plastic
  • Credit Card Use Becoming More Common Among High Schoolers
  • Many Teens Suspicious of Credit’s Slippery Slope
  • ATM Cards Provide Practice with Checking, Savings Accounts
  • Debit Cards Can Build Responsible Spending Habits
  • Traditional Prepaid Phone Cards Also Present Opportunities
  • Teen Cards of All Types Must Offer Real Value
  
  
• Teen Banking and Financial Services
  • Proof of Integrity Is Marketers’ First, Most Difficult Goal
  • Teens Like to Save, and Many Say They’re Good At It
  • Parents Worry About Teens’ Immature Money Management
  • Education and Savings First: Money Management, Spending Later
  • NexTier Bank Hosts Junior Banking Board
  • Merrill Lynch Shows “Investing Pays Off”
  • Schwab, Others Jump on Education Bandwagon
  • Next Step: Tailor Checking to Teens
  • ATMs on Campus Increase Brand Awareness, Convenience
  • Cell Phones Are Future Wave in Account Management

Chapter 2: Teen Attitudes and Demographics

• Introduction
  • Scope of Report
  • Teens Understand the Power of Money
  • Most Teens Want to Be Rich
  • Figure 2-1: Teen Demographics for Agreement with Statement: “I Want to Be Rich,” 2007 (percent of U.S. children age 12-17)
  • Teen Financial Market Represents Big $ Opportunity
  • Teens Know Less About Finances Than They Think They Do
  • Shaky Financial Knowledge Makes Teen Credit Risky
  • Table 2-1: Teen Demographics for Agreement with Statement: “I Want to Be Rich,” 2007 (percent, number and index of U.S. children age 12-17)
  • Table 2-2: Overview of Teen Income Sources and Use of Financial Products and Services, 2007 (percent and number of U.S. children age 12-17)
  • Table 2-3: Population of Potential, Current and Underserved Teen Markets for Financial Services, 2007 (number of U.S. children age 12-17 in thousands)
  
  
• Teen Demographics
  • Teens by the Numbers
  • Figure 2-2: Share of Teen Population by Segment, Age 12-14 vs. Age 15-17, 2007 (percent of U.S. children age 12-17)
  • Total Teen Population = 24.8 Million
  • Today’s Teens the Most Diverse in History
  • Figure 2-3: Teens by Race and Ethnicity, 2007 (percent of U.S. children age 12-17)
  • Attitudes Toward Wealth Differ Among Ethnicities
  • Asian Teens Aspire to High Incomes
  • U.S. Teen Population Shrinking
  • Despite Mature Outlook, Teens Depend on Parents for Living
  • Rural, Small Urban Areas Home to Majority of Teens
  • Most Teens Live in Two-Adult Households
  • Sports, Theme Parks Top Leisure Activities
  • Electronic, Print Media Capture Big Teen Interest
  • Media, Tech Make Teens Happy
  • Money, Mom Make Teens Happy, Too
  • Parents Shield Kids from Physical Hazards, Financial Realities
  • Teen Income Facilitates Connection Between Work and Reward
  • Many Teens Have Paying Jobs
  • Drivers’ Licenses Expand Employment Opportunities; Non-Hispanic Whites Dominate Job Market
  • Four in Ten Teens Live in Households with Income of $75,000 or More
  • Teens in Affluent Households More Careful About Money
  • Higher Household Income May Increase Familiarity with Finances
  • Table 2-4: Population by Ethnicity of Potential, Current, and Underserved Teen Markets for Financial Services, 2007 (number of U.S. children age 12-17 in thousands)
  • Table 2-5: Teen Demographics, 2007 (percent and number of U.S. children age 12-17)
  • Table 2-6: Population Trends in the 14- to 17-Year-Old Age Group, 1980-2015 (number and percent)
  • Table 2-7: Projected Growth in Teens Population by Age Group, 2006 vs. 2011 (in thousands)
  • Table 2-8: Percentage of Population by Size of Metropolitan Area: Teens vs. Adults
  • Table 2-9: Living Arrangements of 12- to 17-Year-Olds, 2006 (number and percent)
  • Table 2-10a: Living Arrangements of 12- to 17-Year-Olds by Race and Hispanic Origin: Non-Hispanic White and Asian, 2006 (number and percent)
  • Table 2-10b: Living Arrangements of 12- to 17-Year-Olds by Race and Hispanic Origin: Black and Hispanic, 2006 (number and percent)
  • Table 2-11: Teen Participation in Selected Leisure Activities: Boys vs. Girls (percent and number of U.S. children age 12-17)
  • Table 2-12: Percentage of Teens Receiving Income from Selected Sources: By Age Group, 12-14 vs. 15-17 (U.S. children age 12-17)
  • Table 2-13: Percentage of Teens Who Receive an Allowance or Money for Chores: By Age Group and Gender, 2007 (U.S. children age 12-17)
  • Table 2-14: Teen Demographics for Receiving an Allowance or Money for Chores, 2007 (percent, number and index of U.S. children age 12-17)
  • Table 2-15: Teen Demographics for Working, 2007 (percent, number and index of U.S. children age 12-17)
  • Table 2-16: Percent of High School Students Employed During Either School Year or Summer
  • Table 2-17: Distribution of Teen Population by Household Income Bracket (percent and number of U.S. children age 12-17)
  • Table 2-18: Financial Profile of Teen Population by Household Income Bracket: Under $75,000 vs. $75,000 or more (percent of U.S. children age 12-17)

Chapter 3: Teen Shopping and Spending

• Understanding What Teens Do with Their Money
• Teens Crave Clothing, Music, Technology
• Figure 3-1: What Teens Spend Their Money On, 2007 (percent of U.S. children age 12-17)
• Teen Girls Outspend Boys in Most Categories
• Teen Boys Spend More on Video Games
• Most Teen Households Have Video Game Equipment
• Video Game Passion Wanes with Age
• Teens Eat Out Often
• Fast Food Attracts Vast Majority of Teens
• McDonald’s Captures Majority of Teens
• Many Teens Know Value of a Dollar
• Spending, Savings Cues Come from Parents
• Irresponsible Spending Habits Begin at Home
• Parents Tend to Indulge Teens’ Whims, Regardless of Income Bracket
• Figure 3-2: Selected Financial Opinions of Teen Population by Household Income Bracket: Under $75,000 vs. $75,000 or More (percent of U.S. children age 12-17)
• Limited Access to Credit, Checking Reins In Spending
• Discount Stores Top Shopping Destinations
• Figure 3-3: Percentage of Teens Who Shopped in Department/Discount Stores in Last Three Months: By Age Group and Gender, 2007 (U.S. children age 12-17)
• Big-Box Retail Offers Entertainment Plus Value
• Lookee-loos Don’t Always Buy
• Figure 3-4: Percentage of Teens Who Purchased in Department/Discount Stores in Last Four Weeks: By Age Group and Gender, 2007 (U.S. children age 12-17)
• Wal-Mart Reigns as King of Discounts, Diversion
• Target Lures More Girls Than Boys
• Target’s Flashy Wii Gift Card May Woo Electronics Buffs
• Girlie Electronics Flash the Pink
• Cell Phones, Internet: For Spending On and Spending With
• Talk, Text, Cameras Create Instantaneous Word-of-Mouth
• Texting, Games, Downloadable Ringtones Define Teen Segment Slivers
• Marketing Through Cell Phones Requires Constant Research
• Teens Shop Internet for Family, Selves
• Even Children, Tweens Help Parents Purchase Online
• Over One-Third Order by Mail, Phone
• Shopping Malls Provide Interactive, Social Experience
• Girls Especially Attuned to Mall Experience
• Luxury Spending Increases Despite Economic Downturn
• Celebrities, Movie Stars Inspire Fashion Aspirations
• “Fast Fashion” Accessories Help Teens Afford a Piece of the Dream
• Rewards, Brand Tie-Ins Can Make Financial Services Relevant
• Table 3-1: Teen Shopping Attitudes: By Gender 2007 (percent of U.S. children age 12-17)
• Table 3-2: What Teens Spend Money On: By Gender, 2007 (U.S. children age 12-17)
• Table 3-3: Teen Shopping and Spending Overview: By Age Group and Gender, 2007 (percent of U.S. children age 12-17)
• Table 3-4: Teen Household Ownership of Video Game Players: By Age Group and Gender, 2007 (percent of U.S. children age 12-17)
• Table 3-5: Teen Attitudes About Video Games By Age Group and Gender, 2007 (percent of U.S. children age 12-17)
• Table 3-6: Percentage of Teens Going to Family Restaurants and Steak Houses: By Age Group and Gender (U.S. children age 12-17)
• Table 3-7: Percentage of Teens Who Agree with Selected Statements About Eating Out: By Age Group and Gender (U.S. children age 12-17)
• Table 3-8: Percentage of Teens Going to Fast-Food and Drive-In Restaurants by Age Group, Gender and Name of Restaurant Chain (percent of U.S. children age 12-17)
• Table 3-9: Teens as Retail Shoppers: By Gender, 2007 (percent of U.S. children age 12-17)
• Table 3-10: Overview of Teen Financial Attitudes and Opinions, 2007 (percent of U.S. children age 12-17)
• Table 3-11: Teen Demographics for Agreement with Statement: “I Tend to Spend Money Without Thinking,” 2007 (percent, number and index of U.S. children age 12-17)
• Table 3-12: Selected Financial Vehicles for Teen Spending, 2007 (percent and number of U.S. children age 12-17)
• Table 3-13: Teens Use of Cell Phones: By Gender, 2007 (percent of U.S. children age 12-17)
• Table 3-14: Teens as Internet Shoppers: By Gender 2007 (percent of U.S. children age 12-17)
• Table 3-15: Teens as Internet/Mail/Phone Order Purchasers: By Gender, 2007 (percent of U.S. children age 12-17)

Chapter 4: Teens and Payment Cards

• Cards Present a Major Opportunity
• Figure 4-1: Percentage of Teens with Payment Cards by Type, 2007 (U.S. children age 12-17)
• Credit and Debit Cards Make Parents Nervous
• Cards Can Help Teens Prepare for Adult World
• Figure 4-2: Percentage of Teens Who Agree with the Statement:
• “Credit Cards Make Shopping Easier”: By Age Group and Gender, 2007 (U.S. children age 12-17)
• Gift Cards Make for Fun Introduction to Paying with Plastic
• Links to Teen Interests, Cool Brands Boost Monetary Value
• American Idol Gift Card Plays Up Celebrity Tie-Ins
• Credit Card Companies Leverage Multiple Use, “Open Loop” Gift Cards
• AmEx Gift Cards “Especially For” Teens
• Teen Gift Cards Build Brand Awareness, Trust for Later Credit Card Use
• Credit Card Use Becoming More Common Among High Schoolers
• Questionable Financial Discipline Belies Cultural Savvy
• Most Teens Want to Avoid Debt
• Figure 4-3: Percentage of Teens Who Agree with the Statement “I Don’t Like the Idea of Being in Debt,” 2007 (U.S. children age 12-17)
• Many Teens Suspicious of Credit’s Slippery Slope
• Figure 4-4: Percentage of Teens Who Agree with the Statement “Credit Cards Are Just Another Way of Getting Into Debt,” 2007 (U.S. children age 12-17)
• Higher Household Income Correlates with Credit Wariness
• Figure 4-5: Indexes by Household Income for Agreement with the Statement “Credit Cards Are Just Another Way of Getting Into Debt,” 2007 (U.S. children age 12-17)
• Cards Help Bridge Lean Times; Most Teens Pay Off Balances Monthly
• Occasional Disconnect Between What’s Affordable, What’s Not
• One-in-Five Teens Agree that Credit Cards Enable Otherwise Unaffordable Purchases
• Figure 4-6: Percentage of Teens Who Agree with the Statement “With Credit Cards, You Can Buy Things You Normally Couldn’t Afford,” 2007 (percent of U.S. children age 12-17)
• Boys, Younger Teens, Hispanics Most Likely to Believe in Credit’s Power to Grasp the Unattainable
• Figure 4-7: Selected High-Index Teen Demographics for Agreement with Statement: “With Credit Cards, You Can Buy Things You Couldn’t Normally Afford,” 2007 (U.S. children age 12-17)
• “Minimum Payments” Can Dash Delusions of Solvency
• Average College Undergrad Debt Shrinking Slowly Despite Increased Card Use
• Financial Discipline Helps Keep Debt In Line
• Parents, Teens and Financial Services Must Work Together
• ATM Cards Provide Practice with Checking, Savings Accounts
• Teens Underrepresented in ATM Card Channel
• Teens with Jobs, Bank Accounts Likely to Have ATM Cards
• Figure 4-8: Selected High-Index Teen Demographics for ATM Card Ownership, 2007 (U.S. children age 12-17)
• Debit Cards Can Build Responsible Spending Habits
• Debit Cards Provide Opportunities for Teen-Oriented Tie-Ins, Rewards
• Cell Phones Users Particularly Open to Card Use
• Boost Mobile Closes Loop Between Phones and Finance
• Rebates, Sweepstakes Sweeten Boost Deal
• Traditional Prepaid Phone Cards Also Present Opportunities
• Lower-Income Teens Still Use Traditional Calling Cards
• Black, Hispanic Teens Use Calling Cards
• Figure 4-9: Selected High-Index Teen Demographics for Having a Telephone Prepaid Calling Card/Credit Card, 2007 (U.S. children age 12-17)
• Prepaid Credit, Debit Cards a Growing Teen Market
• Online Purchasing Just One Advantage Among Many
• Figure 4-10: Selected High-Index Teen Demographics for Using Credit Cards for Internet, Catalog, Mail or Phone Order Purchases, 2007 (U.S. children age 12-17)
• Prepaid Cards Reassure Parents, Keep Spending in Check
• Visa Buxx Cultivates Future Credit Business
• Parents Set Spending Limits, Reload Card at Will
• Tricky Balance Between Parental Concerns, Teen Enthusiasm
• Customized Design, Low Fees Up Coolness Factor
• MasterCard’s Prepaid Allow Card Competes with Visa Buxx
• Education, Responsibility Heavily Stressed
• Allow Card Works on Usual Prepaid Principles
• MYplash MasterCard “Rocks the Plastic”
• Hip Lifestyle, Cool Brands, Great Music—And It’s Already Paid For!
• Emphasis on Teen Independence, with a Nod to Paying Parents
• Hello Kitty Card May Have Gone Too Far
• High Fees Also Criticized
• Conventional Credit Card Might Have Fared Better
• Low-Limit Credit Cards Ease Transition Into Adulthood
• Building Good Credit History Justifies Early Restraint
• Teen Cards of All Types Must Offer Real Value
• Table 4-1: Teen Use of Selected Payment Cards, 2007 (percent and number of U.S. children age 12-17)
• Table 4-2: Percentage of Teens Agreeing with Selected Statements About Credit Cards: By Age Group and Gender, 2007 (U.S. children age 12-17)
• Table 4-3: Percentage of Teens Ageeing with Selected Statements About Payment Cards and Finances: Any Agree, Agree a Lot, Agree a Little, 2007 (percent of U.S. children age 12-17)
• Table 4-4: Teen Demographics for Agreement with Statement: “Credit Cards Make Shopping Easier,” 2007 (percent, number and index of U.S. children age 12-17)
• Table 4-5: Teen Demographics for Agreement with Statement: “I Don’t Like the Idea of Being in Debt,” 2007 (percent, number and index of U.S. children age 12-17)
• Table 4-6: Teen Demographics for Agreement with Statement: “Credit Cards Are Just Another Way of Getting Into Debt,” 2007 (percent, number and index of U.S. children age 12-17)
• Table 4-7: Teen Demographics for Agreement with Statement: “With Credit Cards, You Can Buy Things You Normally Couldn’t Afford,” 2007 (percent, number and index of U.S. children age 12-17)
• Table 4-8: Teen Ownership of Bank Accounts by Type: By Age Group and Gender (percent of U.S. children age 12-17)
• Table 4-9: Teen Demographics for Having ATM Cards, 2007 (percent, number and index of U.S. children age 12-17)
• Table 4-10: Ownership of and Monthly Charges on Cellular and Wireless Phones: Teens with an Income vs. Teens with ATM or Credit Cards, 2007 (percent and index of U.S. children age 12-17)
• Table 4-11: Teen Demographics for Having a Telephone Prepaid Calling Card/Credit Card, 2007 (percent, number and index of U.S. children age 12-17)
• Table 4-12: Teen Demographics for Using Credit Cards for Internet, Catalog, Mail or Phone Order Purchases, 2007 (percent, number and index of U.S. children age 12-17)

Chapter 5: Teen Banking and Financial Services

• Proof of Integrity Is Marketers’ First, Most Difficult Goal
• Teens Like to Save, and Many Say They’re Good At It
• Figure 5-1: Overview of Teen Attitudes on Saving, 2007 (percent of U.S. children age 12-17)
• Parents Worry About Teens’ Immature Money Management
• Those Who “Spend Without Thinking” of Particular Concern
• Teens Underserved in Educational Banking Services
• Financial Services Marketers Walk a Fine Line
• Education and Savings First: Money Management, Spending Later
• Despite High Hopes, High Schoolers Often Unprepared for College Finances
• Banks Can Reach Parents Through Teens
• Opening Kids’ Accounts Gives Parents Unaccustomed Face Time with Personal Bankers
• Banks Can Take Up Schools’ Educational Slack
• Bank-Sponsored Financial Literacy Programs Popular
• NexTier Bank Hosts Junior Banking Board
• Fifth Third Bancorp Gets “Young Bankers” On Board
• Fifth-Grade Finance a Win-Win Situation
• Wells Fargo Takes Education On the Road and On the ‘Net
• Interactive “Fun of Money” Tour Raises Financial Awareness
• Wells Fargo Also Offers “Teen Access” Services
• Parental Involvement, Hands-On Experience Are Key
• “Hands On” Online Education Available for All Age Groups
• Young Americans Bank: The Only Kids-Only Institution
• Even the Youngest Customers Can Take Out Loans
• Partnering with Educators, Nonprofits and Community Advocates Can Boost Banks’ Visibility
• Most Banks Outsource Educational Curricula
• Delaware’s Annual “Summit for Students” Attracts Hundreds
• National Endowment for Financial Education Reaches Out with Financial Planning Curriculum
• Partnerships, Online Access Increase Reach
• Investment Firms Actively Teaching Teens
• Merrill Lynch Shows “Investing Pays Off”
• Public Service Programs Target Wide Audience
• Sesame Workshop Encourages Pre-schoolers to Save
• Schwab, Others Jump on Education Bandwagon
• Financial Management 101: Start with Savings, The Least Controversial Financial Service
• Figure 5-2: Selected High-Index Teen Demographics for Agreement with Statement: “I Am Good at Saving Money,” 2007 (U.S. children age 12-17)
• Rewards, Gifts, Cool Stuff Are Further Incentives to Save
• Banks Get Creative in Encouraging Teens to Save
• Next Step: Tailor Checking to Teens
• Banks Make Checking Attractive with Gift Cards, iPods
• ATMs on Campus Increase Brand Awareness, Convenience
• Figure 5-3: Selected High-Index Teen Demographics for Having ATM Cards, 2007 (U.S. children age 12-17)
• PAYjr Links Internet Obsession with Allowance Allocation to Teach Smart Financial Habits
• Parents Outsource Nagging with Online Chore Assignments
• Early Adopters Say So Far, So Good
• Detractors Mostly Haven’t Tried System Themselves
• PAYjr Savings, Debit Cards Increase Range of Services
• Cell Phones Are Future Wave in Account Management
• An ATM in Your Pocket
• Obopay Leads Push into Youth-Oriented Cell Phone Banking
• Smart Adaptation of PayPal Model
• Teen-Centered, But with Parental Controls
• Transactions Require Both Parties to Have Obopay Account
• Customer Retention Starts Early: Banks Reach Out to Teens Before They Become Teens
• Looney Tunes Savings Club for Kiddie Capitalists
• Kid Zone Accounts Start Small, Build Fast
• Marketing Teen Financial Services into the Future: Move Fast
• Alignment with Teen-Centered Brands Builds Relevance
• Customized Cards, Internet, Cell Phone Pique Teen Interest
• Teens Should Discover You on Their Own
• Back Up Come-Ons with Integrity, Service, Education
• Relevant Websites
• Table 5-1: Overview of Teen Attitudes on Saving, 2007 (percent of U.S. children age 12-17)
• Table 5-2: Teen Ownership of Bank Accounts by Type: By Age Group and Gender (percent of U.S. children age 12-17)
• Table 5-3: Teen Demographics for Agreement with Statement: “I Am Good at Saving Money,” 2007 (percent, number, index of U.S. children age 12-17)
• Table 5-4: Teen Demographics for Having ATM Cards, 2007 (percent, number, index of U.S. children age 12-17)