105317VISA RESEARCH SERVICES 1

TO: DistributionFROM: Michael MarxDATE January 29, 2010

American Mood Trend – January 2010

Background

This represents the latest monthly summary and analysis of the major indices of consumer confidence, both current and future.

Please feel free to share this information with your issuer and merchant clients.

Summary

• Consumer confidence rose modestly in January as present situation confidence rose.

• Business conditions confidence was largely unchanged in January.

• Consumers continue increased reliance on social media for both receiving and communicating opinions of products and services.

Findings

Consumer confidence rose somewhat in January driven by gains in present situation confidence. Present situation confidence rose five points as future expectations confidence was unchanged. Through the volatility of the past year there has been little consumer confidence movement in the past eight months of that year. Even month-to-month change has been minor as consumers believe that their future looks better as they continue to feel that the current situation is poor.

105317VISA RESEARCH SERVICES 2

 Consumer Confidence—Present Situation and Expectations

Index—1985=100 Source: Conference Board—Consumer Confidence Survey

Business conditions confidence was substantially unchanged in January, as optimism remained in positive territory. Those who felt conditions would improve was flat, and the percentage who felt conditions would worsen rose one point. This places the net position at +8.

Business Conditions—Next Six Months

Source: Conference Board—Consumer Confidence Survey

American Mood Trend – January 2010

25232530262222

3030

44

42

23 21 21

61

2025

6565 66

82

104

91

74

114113116118121130

138

7463

6672

5143

27 30

44

36

7467 70

46

76 76

54

414750

62

4943

766969

808589

94

58

0

25

50

75

100

125

150

175

200

J ul Aug Sep Oct Nov Dec J an Feb Mar Apr May J un J ul Aug Sep Oct Nov Dec J an Feb Mar Apr May J un J ul Aug Sept Oct Nov Dec J an

Present Situation Expectations

14

1012

21

10 91110

912

14

1214

161515

12

9

2221 2021

1816

23

10

2121

9

1313

3234

33

2726

22

1614

17

1412

108

25

15 15

1921

37

28

33

23

18 18

38

1312

41

15

20

31

0

5

10

15

20

25

30

35

40

45

J ul Aug Sep Oct Nov Dec J an Feb Mar Apr May J un J ul Aug Sep Oct Nov Dec J an Feb Mar Apr May J un J ul Aug Sep Oct Nov Dec J an

Business Conditions - Better Business Conditions - Worse

2007 2008 2009 2010

2007 2008 2009 2010

105317VISA RESEARCH SERVICES 3

28%

45%

31%

19%

9%

Look for recommendations onwhat to watch, buy, etc., onsocial-networking websites

American Mood Trend – January 2010

It is no surprise that consumers are showing an ever greater propensity to look online for information related to products and services that they are considering buying. In the past that largely meant researching via websites, either specific company-related or other sites designed to aggregate information on products and services. For example, almost half of consumers visit multiple store websites to purchase products at the best price. (Source: Yankelovich Monitor)

Today, consumers are increasingly likely to seek out another source online in their selection process, namely other consumers. Among online users, social networking sites continue to grow users. Though still largely the province of younger consumers, usage among all age groups has grown dramatically over the past three years.

Frequently/Occasionally Visit Social Networking Sites (among those online)

Source: The Futures Company, Yankelovich Monitor 2009/2010

The incidence of consumer online “conversations” related to the purchase of products and services has also reached a significant percentage of US consumers, even among those over the age of 45. Among consumers online 17% claim to post product or store reviews on websites and 28% frequently or occasionally look for these individual consumer recommendations.

Things Do Online Frequently/Occasionally (among those online)

Source: The Futures Company, Yankelovich Monitor 2009/2010

This is reflective of a consumer trend that has become manifest in this recession, namely a decline in trust in institutions and their messages accompanied by an increased reliance on personal outreach and interactive communication to get the “true” facts. In a challenging environment, financial institutions must be aware that bad customer experiences will reach a far larger audience than they have in the past, and that this audience trusts reports from both individuals they know as well as those they do not.

44%

71%

2006

2009

21%

48%

2006

2009

10%

25%

2006

2009

Millennials MaturesBoomersXers

3%

11%

2006

2009

17%

28%21%

10%4%

Post product or store reviews towebsites

40%45% 48%

35%

25%

Read product or store reviewsposted on websites

Total Millennials Xers Boomers Matures