Archive for the ‘Services’ Category

Regional bank hits on novel way to attract business

Wednesday, February 12th, 2014

Banner advertising housing loans outside branch of Keiyo Bank in Inzai

Banner advertising housing loans outside branch of Keiyo Bank in Inzai

Lottery winners who hit the jackpot are always good news stories, but the anonymous lucky individual who was the subject of reports in all major media on Feb. 3 represented a different angle on the topic. Instead of being announced by the authorities who administer the Year-end Jumbo Takarakuji lottery, the ¥700 million prize was publicized by a regional financial institution, Chiba Prefecture’s Keiyo Bank. That’s because the winner of the jackpot didn’t actually have the winning ticket in his or her possession. The bank was holding it for safe keeping.

With interests rates on time deposits being so low for so long, banks, especially smaller regional ones, have a tough time convincing people to become customers and usually resort to special premiums or deals. Keiyo’s is to offer lottery tickets as incentives to open savings accounts. For every one million yen deposited in a three-year teiki yokin (time deposit account), the depositor receives five lottery tickets per year for various drawings. Keiyo, however, only supplies the customer with the number of the ticket, not the ticket itself, which it holds on to. When the drawing is carried out the customer checks the number against the winners and if there’s a match the customer contacts the bank, which then gives the customer the ticket for him or her to cash in.

In this most recent case, the drawing was conducted in early January and the bank, knowing that one of its customers had won, waited for the customer to call. The person didn’t.   After a month, the bank finally called the individual with the happy news.

What’s most interesting about the story is that it isn’t the first time a Keiyo customer has hit it big. The bank has been offering the lottery incentive since March 2007, and in the intervening years there have been 34 ¥1 million winners, two ¥5 million winners and one ¥100 million winner. These numbers give the impression that Keiyo customers have a higher probability of winning, but according to a lottery expert interviewed by Tokyo Shimbun it’s difficult to figure the odds since the bank has never released the total number of tickets it has bought for customers over the years, but likely it isn’t that much because Keiyo is, after all, a regional bank with a limited reach.

As a reference, interest on a three-year time deposit is 0.03 percent, which means for the first year of a ¥1 million account the customer earns ¥300. That amount would buy one ¥300 lottery ticket before the government deducts its 20.315 percent tax on interest.

Side note: In December we wrote about the Post Office lottery for New Years cards. In case you still have them lying around and didn’t check the winning numbers here they are: If the last five digits on any of the cards you received are, in order, 9-7-0-8-5 then you win ¥10,000. If the last four digits are 2-3-4-4, you win a prize of some sort of regional product. And if the last two digits are either 7-2 or 7-4, you win a sheet of postage stamps. You have until six months after the Jan. 22 announcement date to claim your prizes.

Part-timers skewing employment statistics

Thursday, January 2nd, 2014

Take this job and...: Want ads targeting part-timers for specific shifts at a Chiba Prefecture supermarket

Take this job and…: Want ads targeting part-timers for specific shifts at a Chiba Prefecture supermarket

When the government determines the success of Abenomics it has to take into consideration wage inflation, not just price inflation, since real growth can’t be sustained without both. Nevertheless, all wage inflation isn’t created equal.

A recent article in the Asahi Shimbun cited results of a regular survey conducted by Recruit Jobs, an employment-related research institute. In the major metropolitan areas of Japan the average wage offered to part-time food service workers in want ads in November was ¥930, which is 1.3 percent higher than the average amount offered in November 2012. More significantly, this year-on-year increase has been continuing for 25 consecutive months, the longest stretch of increases since the institute started tracking such numbers in 2007.

The standard wage in the restaurant industry is relatively low to begin with, and right now there is a shortage of help nationwide, so Recruit says employers are being forced to offer more money. One example cited by Asahi is a new mall that just opened in Makuhari, Chiba Prefecture, which contains a number of eating establishments, most of which belong to chain operations. Starting wages at these restaurants is between ¥1,200 and ¥1,300 an hour, which is even higher than they are in Tokyo. According to an official at Four Seeds, a company that owns several restaurant chains, more large retail facilities, such as shopping malls, are being built in an around major metropolitan areas, so there is greater demand for food service workers.

However, these numbers are misleading in terms of indicating whether or not the economy as a whole is on the mend. For one thing, the labor ministry says that just because part-time wages in major cities are going up, it doesn’t mean they’re rising for the rest of Japan.

The ministry found that in October, the average monthly take-home for “short-hour part-timers” was ¥94,634, which is 0.4 percent lower than it was in October 2012, and marked five straight months of year-on-year declines. And if the average pay for a part-timer in this industry in 2010 was set at 100, then the salary this year is 98.7.

Despite the fact that the national minimum wage was raised recently, average part-time income is dropping, mainly because companies are hiring more people to work short hours. For instance, the coffee shop chain Pronto targets housewives (which they call “mistresses”) in their 30s and 40s with the promise that they don’t have to work weekends and holidays. In addition, they can take off up to nine full weeks, without pay, of course, in a given six-month period. These women don’t work more than 20 hours a week, and the company likes it because under these conditions they can easily find women willing to work for low pay at short notice.

This trend is also prevalent in the supermarket industry, where employers pay housewives slightly more to work in the morning and the evenings since most housewives prefer only working in the afternoon when they don’t have household responsibilities.

In Tokyo, many food service companies offer higher wages only for peak demand periods to fill short-term staffing shortages. Other times they offer less money. The turnover is high, but this strategy allows the companies more options in controlling personnel costs on a month-to-month basis.

The point is that these workers supposedly want to work shorter hours, and the more people there are working shorter hours for slightly more pay, the more the statistics will reflect higher wages overall, but in truth the pay is just being distributed among more people, meaning per capita wages aren’t going up at all.

Of course, food services is traditionally considered an entry-level or temporary job, not a career track job, but as manufacturing continues to shift overseas, it is an industry that will become more vital as an employer. It’s not quite at the stage that it is in the U.S., where many fast food workers have to support families on what they make, but it might be getting there.

Rental video stores ponder their reason for existing

Sunday, December 22nd, 2013

Many happy returns: Prepaid mailer for Rakuten DVDs

Many happy returns: Prepaid mailer for Rakuten DVDs

It’s coming up to that time of year again, the long post-Christmas New Years break when days not spent in the company of relatives you can’t stand are wiled away in front of the television airing programs you can’t stand even more. Traditionally, that makes it one of the biggest seasons for the rental video business; or, at least, it used to. The industry has been in a progressive slump since it peaked more than a decade ago.

According to industry group Japan Video Software Association, the number of stores in Japan peaked in 1990, when it stood at 13,529. In 2012 there were only 3,648, a drop of three-fourths. In terms of revenues the biggest year for rental videos was 2004, when the industry took in ¥258.4 billion. It has decreased by about ¥100 billion since then.

A recent article in the Mainichi Shimbun quoted a 41-year-old owner of a rental video store in Yokohama who said that he used to run two other shops but had to close both. There’s not enough demand for him to be able to afford all the new movies coming out on DVD or Blu-Ray, and it’s new titles that have driven rentals in the past. He remembers the days when he could charge ¥1,000 for a new movie for two days, but since then prices have dropped drastically, mainly due to competition from major national chains.

The main culprit, of course, is the march of technology. Though on-demand streaming and downloading isn’t as widespread in Japan as it is in the U.S., the big three mobile phone carriers have started offering movies that can be streamed on TV sets at home. The number of titles right now is only about 7,000, but even at ¥500 per title, it beats trudging down to the local rental store, if one actually exists within trudging distance.

The problem with on-demand is that accessing such services requires a certain level of computer literacy that tends to decline the older the customer is. This is always a problem for IT service companies but may be the last bastion of revenue for rental video stores. An editor from the industry magazine Video Insider Japan told Mainichi that the strategy from now on will be for video stores to target “customers in their 60s and 70s.”

But only the major chains can afford to do that, apparently. Between them, Tsutaya and GEO account for 70 percent of all the rental video stores in Japan, and because they can afford to buy as many new titles as they want, they price smaller stores out of business. Tsutaya, however, is a franchise operation, and individual owners may find it harder to compete against GEO outlets, which are company owned. Since Tsutaya franchise owners can set their own prices, some are being forced to match GEO’s in order to compete, while others are keeping prices higher. It all depends on location. Also, Tsutaya has made exclusive deals with some distributors that give them a distinct advantage. For a time, they were the only company that had permission to rent out “The Amazing Spider-Man.”

However, in order to attract this older cohort that is now the main demographic for rental videos, chain stores have to go to them rather than the other way around. Both Tsutaya and GEO offer plans wherein customers pay a set monthly fee for a certain number of disks that are delivered directly to their homes. This system has been available for about 10 years, and the only real innovative change has been the addition of so-called spot rentals, meaning members can order videos a la carte without having to sign up for a plan. Right now, GEO is offering some titles for as low as ¥80, with Tsutaya offering ¥100 (both for limited times). What’s interesting about spot rentals is that, depending on which videos you rent and how many, they can be cheaper than monthly plans.

GEO has three monthly plans. The standard plan is ¥945 for four DVDs. After that there’s an 8-disc plan for a little less than ¥2,000, and a 16-disc plan for a bit less than ¥4,000. When you sign up for a plan you get the first month free, but the real difference is in the delivery fee. Whether your order is a spot rental or part of a monthly plan, the fee is ¥300 for up to seven discs at a time. The fee is ¥500 for orders of 8-16 disks. Regardless of the size of the order, the time limit is 10 days from the day the customer receives the disks. As with all such home delivery systems, the company includes a prepaid envelope for returning the discs. However, it’s important to note that GEO does not charge a late fee for people who belong to monthly plans. Late fees for spot rentals are ¥157 a day.

But GEO and Tsutaya now have to contend with an upstart: Rakuten. The Internet mall’s inventory isn’t as deep or wide as the other two companies, but its spot rental system is in many ways cheaper and more amenable to the way most people rent videos. Rakuten also charges ¥300 for delivery fee, but you can only request up to two discs per order. After that the delivery fee increases in increments of ¥200. In that regard, GEO would seem to have the advantage, but actually not. Brand new titles are priced the same as GEO’s, around ¥300, but older titles are usually priced at around ¥50. And titles that are more than, say, two years old can be as cheap as ¥10 or even ¥5.

Like GEO, the time limit for a Rakuten spot rental is 10 days, but if you see two discs over the course of two days you return the discs and can immediately order two more. They usually arrive within a day of placing the order. For sure, the delivery fee for GEO is cheaper, but if you took full advantage of the fee and ordered 7 discs, you’d still have to watch all of them in less than 10 days, and even at ¥80 per disc, they aren’t as cheap as Rakuten’s.

Rakuten’s system is especially rational if you want to watch full seasons of TV series. Last month we watched the second season of “Homeland,” which, because it’s relatively new, cost ¥280 per disc, with two episodes per DVD. But we also went through the first two seasons of “Mad Men,” which were only ¥5-¥10 per disc, also with 2-3 episodes per disc. And they always had the DVDs we wanted in stock. It beats trudging down to the rental video store.

Don’t throw those boring New Years cards away!

Monday, December 16th, 2013

Betting on the horse: Japan Post presents its New Years postcard selection on its home page.

Betting on the horse: Japan Post presents its New Years postcard selection on its home page.

As promised two posts ago, we’re now going to explain the prizes attached to New Years cards. We pointed out in that article that the custom of sending nengajo (New Years greetings) or nenga-hagaki (New Years postcards) has been declining in recent years, a development that concerns JP because it’s always derived a good part of its revenue from the custom. Last year, JP sold 3.27 billion cards, which sounds like a lot, but represents a 20 percent drop since sales peaked in 1999.

Many years ago they started a lottery contest. Each card has a number printed on it, and sometime in the middle of January, JP conducts a drawing for winning numbers. However, the people who buy the cards and send them are not the same people who receive them and thus have the chance to win prizes, so the lottery incentive for buying cards escapes us, unless you assume that the more cards you send the more you are likely to receive, but that sort of cause-and-effect logic wouldn’t actually kick in until the following year, right?

According to NHK, the idea of combining nengajo with a lottery started in 1949, when the price of a postcard was ¥2 yen. In the years right after the war, the exchange of nenga-hagaki took on special meaning, since it was a good way to inform friends and relatives that you were still alive and where you were. The lottery, which is called otoshidama, the term for New Years gifts of cash given to children, made it even more appealing, because so many people had nothing at the time, so the prizes were for the most part practical: sewing machines, skeins of wool, bolts of fabric. As Japanese society became more affluent, the prizes became more aspirational: TV sets and other high-end home appliances, or coupons for international or domestic travel.

In the Jan. 6, 2010 issue of the weekly magazine Bunshun there is an article about the prizes. That year the grand prize was a 32-inch high-definition flat screen TV. The article goes on to explain the keihin hyoji-ho, or “incentive indication law,” which states that a company which offers prizes as an incentive to boost sales cannot offer prizes whose value is more than 20 times the price of the merchandise or service that is sold, so, theoretically, if a postcard costs ¥50, then the most you could win is something worth ¥1,000. But, in fact, JP got a special dispensation, since a different law was passed specifically for nengajo, and that law says you can offer prices worth up to 5,000 times the price of the lottery ticket.

Another condition of the special law is that if the card is received by a company rather than an individual, and that card is a winner, the person who claims the prize must present proof that he or she is an employee of the company. Another condition is that the prizes must be claimed within six months of the drawing (it’s up to one year for conventional Takarakuji lotteries, which are sold as lottery tickets so the incentive law doesn’t apply).

However, there’s another difference between Takarakuji and nengajo lotteries that’s more fundamental to this discussion. Takarakuji publicizes the rate of winning numbers that are claimed, but JP doesn’t. Bunshun interviewed an expert who conjectures that Takarakuji prizes are cash, while JP prizes are goods. If all the cash available for prizes isn’t won in a given year, Takarakuji just keeps the money and adds it to next year’s jackpot, but what can JP do with unclaimed goods? People aren’t going to be interested in last year’s model TV, and the lesser prizes, like travel coupons, usually come with a time period in which they have to be redeemed. Another prize is sheets of stamps, which are deemed legal tender, but for some reason they are destroyed if not won in the lottery.

The impression one gets from the article is that a fair number of nengajo prizes are not claimed every year, mainly because people don’t really care, and one reason they don’t care is that it’s inconvenient. In order to check the numbers, the receiver has to read the right newspaper on the right day or go to the nearest post office, and most people can’t be bothered. Now, of course, JP publicizes the winning numbers on the Internet, but even that may not be enough, so this year instead of prizes, JP is offering cash, thus making it more like otoshidama.

It’s not a lot of cash, though. The top prize is only ¥10,000. The incentive is that the odds are more in the public’s favor. In the past, when the top prize was an expensive appliance, the odds of winning were one in a million. But this year there are 33,936 first prize winning cards, which means the odds of getting one is one in 100,000. There are also 339,365 furusato prizes (“home town” prizes, meaning products associated with specific regions in Japan), so the odds of winning one of those is one in 10,000. And the other prize is, again, sheets of stamps. The odds of winning those is one in fifty.

JP will announce the winning numbers on Jan. 19.

For customers of Japan’s biggest bank, it’s about to become harder to avoid fees

Tuesday, December 10th, 2013

Mickey Mouse club: passbook and Direct card for MUFG account holders

Mickey Mouse club: passbook and Direct card for MUFG account holders

Tokyo Mitsubishi UFJ Bank (MUFG) is Japan’s largest bank in terms of number of branches, but there are none within the borders of the city where we live, which is only an hour by train from Nihonbashi, Tokyo. Since all of our freelance work is paid through the MUFG account we set up in the Aoyama branch years ago, this could be a problem, but MUFG offers online banking services and there are plenty of convenience stores with ATMs within walking distance of our apartment in case we need cash.

But that’s going to change on Dec. 20, when MUFG’s new ATM policy goes into effect. For people who live near a branch of the bank, the changes are a good thing. At present, account holders can withdraw money from MUFG ATMs without having to pay a handling fee if they do so between 8:45 a.m. and 6 p.m. on weekdays. At all other times they have to pay an extra ¥105. Starting December 20, the time for free withdrawals is extended to 9 p.m., and that includes weekends and holidays, which will also be free from now on. The ¥105 fee is still in effect from 9 p.m. to 8:45 a.m.

Things are different, however, for convenience store ATMs. Presently, account holders for certain banks can use CS ATMs for free during the day on weekdays. For MUFG customers it’s the same as it is for bank AMTs — no fee between 8:45 a.m. and 6 p.m. But starting December 20, a ¥105 fee will be charged for withdrawals from CS ATMs between 8:45 and 6, and a ¥210 fee for withdrawals at other hours. So that means we can’t avoid paying a fee if we need cash quickly.

But there are ways to circumvent the fees if you’re an MUFG customer, it’s just that they’re not that easy to understand, so we’ll try to make it simple.

In principle, customers who have accounts called Super Futsu Yokin (Main Bank Plus) can withdraw cash from ATMs for free, though it depends on your “stage” and the type of ATM.

White stage: At the end of the month, if your account balance is at least ¥100,000 you can withdraw cash from an MUFG bank ATM for free any time, even in the middle of the night. This also applies to account holders who have an MUFG-issued credit card, in which case a minimum balance is not required. This no-fee condition is effective from the 20th of the following month until the 19th of the month after that.

Silver stage: At the end of the month, if your account balance is at least ¥300,000, or if you receive your salary in your account and your salary is at least ¥100,000 a month, then you can withdraw cash from bank ATMs anytime for free and up to three times during the following month from CS ATMs for free any time. Again, the month is counted as starting from the next 20th to the following 19th. Note that “salary” has to be transferred as such (kyūryō) and printed in your passbook.

Platinum stage: At the end of the month, if your account balance is at least ¥5 million, or if you have taken out a housing loan with MUFG and the balance is more than ¥5 million, there are no fees anywhere for anything. You can also make up to three money transfers (usually ¥315) in a month’s time for free.

One more catch: To qualify for any of these deals you have to register your account for MUFG Direct, which is MUFG’s internet banking service. Good luck.

Government tries to jolt EV sales with charging station subsidies

Wednesday, November 27th, 2013

Newspaper ad promoting installation of recharging stations for EVs

Newspaper ad promoting installation of recharging stations for EVs

Norway boasts the highest per capita ownership of electric cars in the world, for a number of interrelated reasons, it seems. The tax on purchases of new cars, all of which are imported, can be more than 100 percent, depending on weight and fuel efficiency, but it’s almost zero for electric cars. The annual automobile tax is about a seventh of the tax burden for a gas-powered vehicle. This savings is apparently enough to offset the higher sticker price of electric cars. According to a friend of ours who is Norwegian, the American Tesla sells for 580,000 kroner, or ¥9.6 million, and there is a six-month waiting list. We asked our friend if there were enough high-speed charging stations in Norway, and he said there are about 4,000, which is not considered enough but he says most people are “satisfied” with charging their EVs at home, where it takes about 8 hours to top them off.

In addition to offering tax breaks, the government promotes EVs by subsidizing the installation of charging stations. EVs do not have to pay road tolls, and they can use lanes that are normally limited to buses and taxis. More significantly, despite the fact that Norway’s wealth is derived from oil, its gas prices are among the highest in the world, twice as much as they are in Japan. So while EVs are very expensive to buy , in the long run they are much more economical thanks to the government.

One of the reasons auto-related taxes are so high in Norway is that the country has no automotive industry to protect. Electric cars are manufactured in Japan and are relatively cheap, but much less popular. At last week’s Tokyo Motor Show, Carlos Ghosn, the CEO of Nissan, which makes the electric Leaf, admitted that EVs weren’t selling as well as expected and that the company’s sales goal of 1.5 million units by 2016 would not be reached.

According to Sankei Biz, EV sales in Japan have picked up slightly in recent months, and as of October 120,000 electric cars have been sold in Japan since they were introduced. About 87,000 of these were made by Nissan. Ghosn says the main reason the target won’t be met is “lack of infrastructure,” meaning lack of charging stations.

In August, Toyota, Nissan, Honda and Mitsubishi announced that they would jointly build more recharging stations throughout Japan to promote electric vehicle sales, with the help of government subsidies, and last week the four automakers agreed on the details of “specific financial assistance” to parties who install charging stations.

Tokyo Shimbun reports that at present there are 1,900 quick charging stations in Japan and about 3,500 normal charging stations. The government will provide subsidies of up to ¥1.7 million to businesses that install quick recharging stations on their properties and ¥400,000 to businesses that install normal recharging stations. The government’s aim is to increase the number of quick stations by 4,000 and normal stations by 8,000, though no timeline has been given.

These subsidies are being offered through both the central government and local governments. Maintenance of the stations will also be subsidized for a limited time. If the business is a convenience store, it has to have parking for at least ten cars, and if it’s a gas station it has to be open 24 hours. Applications for the subsidy, however, will only be taken until February of next year.

Collecting organizations try to give credit where it’s due, don’t always succeed

Thursday, November 7th, 2013

In a recent series on credit information reporting, the Asahi Shimbun explained the plight of a young Kanto woman who had applied for a credit card last March. The card she was interested in offered discounts at selected stores and could be used as an IC card for public transportation. It also had an attractive point system. Almost all her work colleagues had the card and since her financial particulars were the same as theirs she didn’t think she’d be turned down, but she was and the rejection confused her. She had one other credit card, which she had always paid on time. When she called the credit company that refused her they said they couldn’t give her the reason for the rejection.

A gift campaign notice that comes with a monthly credit card statement

A gift campaign notice that comes with a monthly credit card statement

Then she received a letter from Softbank Mobile, her cell phone service carrier, which said that due to a mistake her payments had been reported to a credit information (CI) company as being delinquent. The period of her false delinquency, she realized, fell during the same time that she applied for the credit card. In the letter Softbank said that it had corrected the mistake with the CI company, and when she applied for the card again after a while, she was approved, but when she tried to find out why they had changed their mind the company again said they couldn’t tell her.

Such situations are not uncommon, but since credit card companies are not obliged to give reasons for rejecting or accepting customers, most applicants have no idea that these problems even exist until it’s too late.

In Softbank’s case, the carrier was actually alerted to the “mistake” last March when customers pointed it out to them. The company investigated the claim and found that between December 2012 and March 2013, about 63,000 customers were reported to credit information companies as having been late with their payments, even though they hadn’t been. The reason for the mistake was fairly complex, and common enough for such a reporting system. All of the affected customers, including the woman profiled by the Asahi, had purchased their terminal devices — meaning their cell phones — through a revolving credit plan. Moreover, they accumulated points over time that could be redeemed as credit through the revolving payment system.

Softbank reported all this information to the relevant CI collecting company, but because of a computer programming redesign that took place late last year the settings that translated points into credit did not work correctly, so people who had paid for their cell phones through points were incorrectly flagged as being delinquent as far back as 2009.

When a financial institution screens someone to determine if the person is credit-worthy, they use CI from various sources: the Credit Information Center (CIC), which mostly works with credit card companies and revolving payment plans; the Japan Credit Information Reference Center Corporation (JICC), whose members are consumer loan outfits; and the Japanese Bankers Association, which collects information related to bank loans. When someone applies for a credit card or a loan the institution requests credit history information from the relevant organization. All lenders and retailers who offer revolving payment plans are obliged by law to report credit histories of customers to one of these CI organizations.

CI includes personal data, such as name, address, birthdate and nature of the transaction; as well as “payment information,” including payment trends and the balance of the account. As long as the customer pays on time, no information is recorded, but when the customer misses a payment the CI collecting company receives a notice of there being an “unpaid situation.” If that situation continues for 3 months straight, the payment situation is reported as being “irregular,” which means the customer is placed on a blacklist.

Being on a blacklist does not necessarily mean that the person will lose his or her credit card or be denied a loan. The financial institutions who request this information for screening purposes can interpret it however they want, but generally if an irregularity is persistent the person’s credit history will be tarnished. Information about irregularities stay in the customer’s credit history for five years, even if the loan or credit bill has been paid off. However, if the irregularity is the result of a mistake on the part of either the company reporting the credit information or the company collecting it, then it is immediately removed from the record.

The problem is that often such mistakes don’t come to light, and while credit reporting companies and lending institutions or credit card companies are not obligated to reveal reasons for rejections to applicants, the credit collection companies are. For instance, if you have a question about your credit card history you can call CIC and, for a fee (¥500-¥1,000), they will give it to you. It’s the same for the other two organizations, depending on where you have borrowed money. An expert in the Asahi article recommends that anyone planning to take out a large loan check beforehand with CI collecting organizations to find out whether or not there may be problems.

The Asahi also reports that an increasing number of young people are showing up on blacklists due to their phone bills. CI, it should be noted, has nothing to do with paying utility bills, a matter that is strictly between the utility and the customer. In the case of cell phones, CI is only reported on people who have bought their phones through revolving payment systems, which are usually attached to phone bills.

The problem here is that many young people forget that they are paying back money loaned to them for their phones. They think that they are paying their phone bill, so if they’re late with a payment they simply have to pay a small penalty. They don’t realize that their credit history is being damaged in the process. In many cases, in fact, it is their parents’ credit history that’s being damaged, since some parents cosign for their kids’s cell phones. It gives them more reason to monitor their cell phone usage.

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