As Baby Boomers Begin Transfer of Economic Influence, Echo Boomers Displaying Practical and Mature Spending Habits

Visa Predicts Echo Boomers Will Account for $2.45 Trillion in Spending by the Year 2015

SAN FRANCISCO, May 23, 2007

As Baby Boomers move toward retirement, their massive influence on consumer spending is about to be eclipsed by the nation's second largest generation - Echo Boomers.

To better understand what this generational shift means to a nation whose economy is built on consumer spending, Visa USA commissioned a survey of Echo Boomers (born 1979 to 1989; ages 18 to 28) and Baby Boomers (born 1946 to 1964; 43 to 61 years old). The results offer insights on where, how and why this transfer of spending power may impact the economy.

The first of four installments explores contrasts in self-image between the generations and related patterns of spending, saving, and planning. It reveals Echo Boomers to be more practical and mature in their spending habits and more generous to others, characteristics often not associated with their generation.

"The Baby Boomer generation has had a profound influence on the U.S. economy over the past several decades," said Wayne Best, Visa USA's chief economist. "However, as they enter the 'golden years' and their spending influence wanes, we must begin to focus on the even larger spending impact that Echo Boomers will have on our economy."

Visa USA estimates that by the year 2015, the Echo Boomer generation will account for approximately $2.45 trillion in annual spending.

Echo Boomers View Their Own Spending Habits as Responsible; Skeptical of Others Within Their Generation
The study reveals that Echo Boomers, who believe they are facing a difficult economic future, are demonstrating a more practical and mature approach to spending beyond their years.

Nearly half of Echo Boomers (48 percent) describe themselves as savers.
When it comes to shopping, Echo Boomers are focused on getting more value for their money: 69 percent consider themselves wait-and-see shoppers, and 83 percent say they are bargain shoppers.
80 percent of Echo Boomers stick to a strict budget when making purchases and 81 percent describe themselves as trying to cut back on what they spend.
Even at their young age, more than 70 percent of Echo Boomers are concerned about having enough money for retirement, a degree of concern similar to the about-to-retire Baby Boomers (78 percent).

While Echo Boomers view themselves as responsible spenders, they are increasingly skeptical as to whether their entire generation is doing the same. According to the survey, when asked to compare their peers to members of other generations, 65 percent of Echo Boomers believe their generation is falling behind economically and 81 percent do not believe their generation is spending more responsibly.

Echo Boomers View Spending as an Opportunity to Spread the Wealth
Although Echo Boomers have been characterized as a generation too focused on its own wants and needs and unmindful of others, survey data suggests that they view spending as a way to give back to others, particularly family members and charities.

88 percent of Echo Boomers like to buy things for others more often than buying things just for themselves.
If they had extra or discretionary money to spend, 63 percent of Echo Boomers would most likely spend that money on something for others.
Approximately 81 percent of Echo Boomers say they are giving what they can to charities.

Baby Boomers Have Negative Views Towards Echo Boomers
According to the survey, Echo Boomers' and Baby Boomers' perceptions of each other provide striking contrasts. Whereas Echo Boomers have mostly positive views of their older counterparts, Baby Boomers have largely negative views of Echo Boomers and tend to misunderstand this generation.

Only 25 percent of Baby Boomers describe the Echo Boomers as an admirable generation compared to 68 percent of Echo Boomers who admire Baby Boomers.
Approximately 68 percent of Baby Boomers believe Echo Boomers are too self-centered and focused upon themselves
While Baby Boomer have a desire for youth, only 7 percent would prefer to be a member of the Echo Boomer generation

"When you consider that many of the individuals setting business and marketing strategy today are Baby Boomers," said Susanne Lyons, CMO, Visa USA, "it's alarming to see that as a generation, they have various misconceptions of a demographic projected to be so influential."

Additional highlights from "How America Spends" include:

According to the Yankelovich Monitor, being seen as "financially successful" is important to 49 percent of Echo Boomers, a 13 percent increase since 2002.
Echo Boomers (77 percent) more often feel the need to manage their spending better than Baby Boomers (66 percent).
Echo Boomers believe they have more stress and anxieties compared to other generations (71 percent).
Nearly half of Echo Boomers (49 percent) think that they do not have a better life compared to other generations.

How America Spends
How America Spends was conducted by The Segmentation Company (TSC), a division of Yankelovich, between February 22, 2007 - March 12, 2007. The study included 1,000 interviews (500 Echo Boomers; 500 Baby Boomers) via telephone using random digit dialing (RDD). Survey results are nationally representative, and the margin of error for each generation group is ? 4.5 percent.

Upcoming installments of "How America Spends" will cover topics ranging from what influences Echo Boomer and Baby Boomer spending and which retail categories will benefit the most from their spending habits.

To review the "How America Spends" survey, please visit www.visa.com.

About Visa USA
Visa USA is a leading payments brand and the nation's largest payments system, enabling banks to provide their consumer and business customers with a wide variety of payment alternatives tailored to meet their evolving needs. Visa USA is committed to increasing the choice, convenience, acceptance and security of Visa payments for all stakeholders - financial institutions, cardholders and merchants. In the United States, more than 521 million Visa-branded cards have been issued by our 13,320 financial institution customers.

Visa products generated nearly $1.8 trillion in total volume in the United States through March 2007 and enjoy unsurpassed acceptance around the globe. For more information, visit www.visa.com/media

About The Segmentation Company
The Segmentation Company (TSC), a division of Yankelovich, is a full-service custom research division conducting research for business, the media, associations, and government. It specializes in studies conducted for media release as well as in segmentation research, positioning studies, brand equity, and market sizing.

Yankelovich, Inc. (www.yankelovich.com) delivers measurable breakthroughs in marketing productivity for it clients. For more than 30 years, the Yankelovich MONITOR has tracked and forecasted consumer value and lifestyle trends. Yankelovich is headquartered in Chapel Hill, NC.

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