Parents Say Back-to-School Spending on the Rise - MasterCard Survey Shows 37% to Spend More in 2005; Parents Plan to Spend Most on Clothing, Books and Supplies

PURCHASE, N.Y.--(BUSINESS WIRE)--July 19, 2005--With summer half over and start of the new school year approaching, parents are beginning to plan for back-to-school shopping. On average, parents of U.S. students college age and younger expect to spend $573 this year on back-to-school items, according to the results of the second annual Back to School Spending Index survey sponsored by MasterCard International and conducted by marketing research firm Ipsos-Insight.

More than one in three (37 percent) parents expect to spend more this year than last and 22 percent anticipate 2005 back-to-school expenses for books, clothes, and supplies to exceed $750. Parents anticipate spending the most on clothing for the coming school year.

“As the survey demonstrates, parents are planning ahead for the expenses associated with back-to-school purchases and recognize that payment cards are especially useful for managing their personal finances.”

The MasterCard Back to School Spending Index survey shows that parents continue to rely on payment cards to help manage spending and are planning ahead before hitting the stores.

-- More than half of parents (53 percent) with children college age or younger said they plan to use payment cards for back-to-school purchases with 27 percent citing they plan to pay by credit card and 26 percent planning to pay by debit card.

-- Two-thirds of parents (66 percent) plan in advance for back-to-school shopping. Thirty percent plan to shop during pre-determined times prior to the start of the school year. Twenty-seven percent plan to wait for sales at specific stores where they traditionally shop, and nine percent plan to shop during their state's tax-free holiday.

-- Most parents plan to shop at discounters (86 percent) and department stores (64 percent) for the coming school year.

"Parents have come to rely on the convenience and flexibility payment cards provide when paying for purchases, during the busy back-to-school season," said Fred P. Gore, senior vice president, North America Acceptance, MasterCard International. "As the survey demonstrates, parents are planning ahead for the expenses associated with back-to-school purchases and recognize that payment cards are especially useful for managing their personal finances."

Retailers are also working hard to capitalize on niche markets such as back-to-school shoppers and to broaden their opportunities for sales through incentives and targeted marketing efforts. According to the International Council of Shopping Centers, sales will increase five to six percent during the combined August-September core months for back-to-school spending on apparel and shoes, books and computers.

Clothing retailers have an obvious stake in back-to-school sales, but drugstores, office supply stores and even grocery stores will get a piece of the action, with increased sales of computers, lunchboxes, notebooks, pens and calculators.

About the Ipsos-Insight Survey

MasterCard commissioned the Ipsos-Insight study as a part of an ongoing effort to better understand consumer attitudes and behaviors with regard to school spending and money management. From July 12-14, Ipsos conducted interviews among 292 parents of children in school (pre-school to college) who use credit or debit cards. This study is based on a statistical sample that provides a representative cross section of the adult population of the continental United States. Respondents were screened to ensure that they used either a credit or debit card and were the parent or legal guardian of at least one school aged child. The margin of error for 292 completed interviews is +/- 5.74%.

About MasterCard International

MasterCard International is a leading global payments solutions company that provides a broad variety of innovative services in support of our global members' credit, deposit access, electronic cash, business-to-business and related payment programs. MasterCard International manages a family of well-known, widely accepted payment cards brands including MasterCard(R), Maestro(R) and Cirrus(R) and serves financial institutions, consumers and businesses in over 210 countries and territories. The MasterCard award-winning Priceless(R) advertising campaign is now seen in 96 countries and in 48 languages, giving the MasterCard brand a truly global reach and scope. For more information go to www.mastercardinternational.com or refer to our filings with the U.S. Securities and Exchange Commission.

About Ipsos

Ipsos is a leading global survey-based market research company, owned and managed by research professionals. Ipsos helps interpret, simulate, and anticipate the needs and responses of consumers, customers, and citizens around the world. Ipsos member companies offer expertise in advertising, customer loyalty, marketing, media, and public affairs research, as well as forecasting, modeling, and consulting. Ipsos has a full line of custom, syndicated, omnibus, panel, and online research products and services, guided by industry experts and bolstered by advanced analytics and methodologies. The company was founded in 1975 and has been publicly traded since 1999. In 2004, Ipsos generated global revenues of EUR 605.6 million ($752.8 million U.S.). To learn more, visit: www.ipsos.com