NEA Financial Service Program Update

NEA Financial Service Program Update

This NEA Financial Services product bulletin provides notification of upcoming changes to the NEA Credit Card Program and the NEA Line of Credit.

Variable Rate NEA Credit Cards

The Annual Percentage Rate (APR) on the Variable Rate NEA Credit Cards was lowered as of April 1, 2001, as a result of recent decreases in the U.S. Prime Rate.

The APR for the Variable Rate NEA Credit Cards is based on the U.S. Prime Rate, as published in the Wall Street Journal, on the 15th day of the month prior to the beginning of each calendar quarter (March 15, June 15, September 15, and December 15).

During the last quarter (December 15, 2000 through March 15, 2001), the Prime Rate dropped from 9.50 percent to 8.50 percent. The APR for the NEA Premier Gold, NEA School Days and NEA Preferred Retired Variable Rate Credit Cards is the U.S. Prime Rate plus 7.1 percentage points. The chart that follows summarizes variable rate changes that go into effect April 2001.

Product	Previous	New	Effective Date

NEA Premier Gold/School Days	16.60%	15.60%	April 2001
Preferred Retired Variable Rate	(prime+7.1%)	(prime+7.1%)	Statement Closing
Accounts	xxxxxxxxxxxxxxxxxxx	xxxxxxxxxxxxxxxxx	Date

Participants who carry the Varialbe Rate NEA Credit Card will see the new rates reflected on their April 2001 credit card statements.

NEA Credit Card Travel Rewards Adjustments

The goal at NEA Member Benefits (NEA MB) is always to provide members with the best possible combination of value and service. However, costs to provide the NEA Credit Card Travel Rewards Program have continued to increase significatly over the past year. The current NEA Travel Rewards Program is unsustainable over the long-term dure to the generous reward terms and the way in which members have used the Program.

As a result, NEA MB has worked with MBNA America Bank, N.A. (MBNA) to modify the NEA Credit Card Travel Rewards Program so that it can continue to be offered while remaining highly competitive with other travel programs in the marketplace.

This chart that follows outlines the changes to the NEA Credit Card Travel Rewards Program that will go into effect on December 31, 2001.

xxxxxxxxxxxxxxxxxxxxxxxxx	Current NEA Travel Rewards	NEW NEA Travel Rewards (effective December 31, 2001)
Annual Fee	$30.00	$45.00
Points for round-trip ticket within the continental U.S.	(15,000 between regions)–maximum ticket value $500 10,000 (within region)– maximum ticket value $300	25,000–maximum ticket value $400
Points for round-trip ticket to Europe (select cities)	35,000–meximum ticket value $1,000	50,000–maximum ticket value $800
Points for round-trip ticket to Alaska, Hawaii, Canada, Mexico, and the Caribbean	25,000–maximum ticket value $600	35,000–maximum ticket value $600
Points for round-trip ticket to South America, Central America, Australia and Asia (select cities)	Not Available	75,000–maximum ticket value $1,200
Points for hotel stays	3,000–maximum value $110 5,000–maximum value $200	5,000–maximum value $80 10,000–maximum value $160 15,000–maximum value $240
Points for car rentals (mid-size vehicles)	1,000 (single weekend day)–maximum value $35 2,000 (single weekday)– maximum value $60 9,000 (seven days)– maximum value $300	2,500 (single weekday or weekend day)–maximum value $60 15,000 (seven days)–maximum value $300

In addition to these changes, a new feature called "Unlimited Worldwide Redemption Options" is being added to the Program. This feature allows participants who are already redeeming at least 25,000 points to redeem additional points at a value of $.01 per point. The points can be used for one of the following: 1) a second ticket; 2) the difference between the cost of the reward and the maximum value in cases where the cost exceeds the maximum value; 3) the incremental cost for an upgrade to first class; 4) cruise, tour, rail, of other customized travel offered throuhg Palladian Travel Services. This option will give members more flexibility in redeeming points.

The new NEA Credit Card Travel Rewards Program remains extremely competitive with other travel rewards programs in the marketplace. Unlike most other travel rewards programs, the NEA Credit Card Travel Rewards program continues to offer the benefit of no blackout dates and no limited seating for reward redemptions. In addition, free travel rewards are not limited to a single airline.

Current NEA Credit Card Travel Rewards participants will be notified of these changes more than eight months in advance to allow the maximum time for them to earn and redeem free travel rewards under the cuurent reward schedule. Current participants will be able to earn and redeem travel rewards under the current schedule through December 30, 2001, for travel up to one year subsequent to that date (December 2002). notification of the NEA Travel Rewards Program changes will be mailed to current Travel Rewards participants in April 2001.

Effective immediately, all state and local affiliates should discard their current stock of NEA Travel Rewards brochures. Updated brochures will be available when the new NEA Credit Card Travel Rewards Program takes effect.

In July and August of this year, minor modifications to the terms of the NEA Credit Card and NEA Line of Credit programs will also be implemented. These modifications include changes to minimum payments, cash advance transaction fees, and the method by which finance charges are compounded. They are described in detail in the chart that follows.

	Current	New
Minimum Payment	2% of outstanding balance as of the billing date	The lesser of finance charges and fees assessed for the month plus $15 or 2.25% of the outstanding balance as of the billing date (Effective July 1, 2001)
Cash Advance Transaction Fees	NEA Credit Card bank ATM advances: 2% of cash advance ($2minimum/$10 maximum) NEA Credit Card cash advance checks: 1% of cash advance ($2 minimum/$10 maximum) No cash advance fee on NEA Line of Credit	2% of cash advance ($2 minimum/$30 maximum) (Effective July 1, 2001)
Interest Compounding	Interest compounded monthly	Interest compounded daily (Effective August 1, 2001)

The terms and conditions of the NEA Credit Card Proram continue to be consistent with or better than those of competivive credit card programs in the marketplace. NEA Credit card and NEA Line of Credit participants will receive notification of these changes through an insert in their April 2001 statements.

If you have questions about the changes to the NEA Credit Card Program of the NEA Line of Credit, please call NEA Member Benefits toll-free at 1-800-637-4636, Monday - Friday, 8 a.m. to 8 p.m. (or Saturday, 9 a.m. to 1 p.m.) ET, or Diem Sepp, at the same number, extension 3522.