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T A B L E__T A L K

Hackers: Should you hire them or lock them up with nothing but a manual typewriter? Discuss the morality of hacking in the Digital Culture area of Table Talk

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R E C E N T L Y

Dear author
By Pamela LiCalzi O'Connell
What happens when a novelist puts his e-mail address on the book jacket?
(04/08/98)

Popcorn with your operating system?
By Scott Rosenberg
Microsoft beams its vision of computing's future into your local multiplex
(04/07/98)

Gene blues
By Jeffrey Obser
Why you should think twice before betting your life on genetic testing
(04/06/98)

21st Challenge No. 7 Results
By Charlie Varon and Jim Rosenau
Virtual gyms, calculator implants and other bright ideas for techno-schools
(04/03/98)

Beck to the future
By Milo Miles
Defying copyright, purveyors of "recombinant music" use the Net to make new sounds out of old shards
(04/02/98)

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BROWSE THE
21ST ARCHIVES

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BY ANDREW LEONARD | "Take control of your finances!" "Get your credit card debt under control!" "Move to a better, brighter financial future!"

Today's marketing mantras for personal finance software ring with the exhortatory power of 12-step programs run amok. That's a bit of a change from days of yore, when products like Intuit's Quicken were billed as handy-dandy checkbook balancers and a great way to keep track of receipts. Now they're all about escaping the "consumer debt morass." Once, personal finance software wanted to save us from paperwork; Now it wants to save us from ourselves.

It couldn't be happening at a better time. We live in the Age of Consumer Debt. The average American household owes over $4,000 on four different credit cards. Last year, 1.3 million people declared personal bankruptcy in the United States, a 20 percent increase over 1996. We are a nation in a spending frenzy -- encouraged all along the way by banks, car dealers, department stores and credit card companies.

Few dissenting voices are heard -- but among the loudest we can now rank Quicken and its ambitious competitor, Microsoft Money. Girded with Debt Reduction Planners and FYI Advisors, Quicken and Money are here to take arms against the sea of debt.

If the strategy works, millions of Americans might get their financial houses in order -- and prove, along the way, that there's money to be made in getting people to hold on to their wallets. But it's not quite a done deal. Intuit and Microsoft have made millions of dollars by persuading consumers to do away with messy pens and pencils. Now they want to make millions more by altering consumer spending habits. They may find, however, that their message -- debt is bad for you -- falls on deaf ears.

It doesn't take a ton of research to recognize that debt is a powerful consumer issue. When two-thirds of all Americans are carrying a credit card balance every month, that signals, loud and clear, the presence of a huge potential market.

"Everything we do is driven by consumer research," says Roy Rosen, a Quicken product manager, explaining why Quicken first introduced its Debt Reduction Planner. "We were looking at what consumers were interested in, and we started to recognize a much greater interest in getting help with credit and debt than in the past. And at the same time we saw that credit card balances were rising faster than income, and only a third of households were paying back their credit card balance. Those were pretty dramatic statistics."

"We had crossed the 9 million threshold," says Rosen. "When you have that many people using Quicken you are moving out into the mainstream consumer market, and you have to start addressing mainstream concerns."

Debt is clearly one of those concerns.

"It's a core need," agrees Julie O'Brien, a product manager for Microsoft Money. "It's absolutely something that resonates with consumers when we do usability testing and focus groups. Reducing debt is certainly at the top of the list."

Although the message sent by Quicken and Money marketers has become more explicit in recent years, the subtext for consumers of personal finance management programs has always been the same: These programs will put you in control of your money. And right now, Quicken is at the top of that list, commanding a dominant 80 percent of the market for "PFMs" -- personal finance management programs.

Quicken has reached that point by instilling a cult-like sense of loyalty on the part of users who can't imagine retreating back to a world of subtraction errors and shoe boxes overflowing with credit card receipts. They are grateful to the point of religious fervor. As Quicken "evangelist" Richard Katz declares, "The No. 1 thing I hear at user groups across the nation is, 'If there was a church of Quicken, I'd join it.'"

The ranks of devotees include finance experts as well as ordinary consumers. According to Scott Burns, a personal finance columnist for the Dallas Morning News, "If we did a survey I think we'd find a bimodal population when it comes to money management. One group is in over their heads and doesn't know the way out. You read about them in the bankruptcy statistics. The other group uses Quicken. Knows what their debts are. Is working on reducing them. And stops going out to dinner when the Visa register they keep in Quicken tells them they've spent their limit for the month on the 21st."

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N E X T_P A G E .|. Quicken weenies in death match with masters of debt

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ILLUSTRATION BY RICHARD SALA