Press Release

Company's Voluntary Responsible Lending Initiatives Are Unparalleled in the Industry, Offering Clearer Disclosures, More Choices and Improved Customer Rewards

Prospect Heights, IL, February 27, 2002 -- Household International (NYSE: HI - news), one of the nation's oldest consumer lenders, announced today significant additions to its already extensive set of voluntary responsible consumer lending practices. Following on the heels of the company's Best Practice Initiatives announced in July 2001, Household is once again raising industry standards for responsibly serving middle-market borrowers.

Household will immediately begin the implementation of the following, unprecedented Best Practice Initiatives on new real estate loans originated in its 1,400 HFC and Beneficial branches in order to provide borrowers with clearer information, increased flexibility and better benefits:

-- Simplified one-page disclosure - A simplified, one-page disclosure that is written in "plain English" to help borrowers fully understand key loan provisions;

-- 100% satisfaction guarantee - A 100% satisfaction guarantee on all loans that allows borrowers to liquidate the loan at no cost within 10 days of that loan being made;

-- Added information/protections on direct mail loans - Additional verbal disclosure (via toll-free hotline) on direct mail loans to eliminate any confusion and help borrowers understand key terms/provisions before they accept the loan;

-- Clear choice on prepayment fees - An option allowing all new real estate customers the flexibility of choosing a lower-rate loan with a prepayment fee or a higher-rate loan without a prepayment fee. And, shortened prepayment fee coverage periods for customers with good payment patterns or for those customers who sell their homes;

-- Caps on points and fees - A three percent cap on origination fees and a reduction of the total amount of discount points available to two;

-- Significantly reduced rates for responsible borrowers - An unparalleled interest rate reduction of up to 300 basis points (three percent) for responsible borrowers. This potential rate reduction is awarded in increments of 25 basis points (.25 percent) after each set of 12 consecutive on-time loan payments. This program is available for qualified real estate borrowers after just one year and will continue to accrue up to a maximum of 12 rate reductions.

"NCRC has been engaged in meaningful dialogue with Household for some time now. The company has demonstrated a pattern of positive policy improvements and I challenge other lenders to follow suit,'' said John Taylor, president of the National community Reinvestment Coalition. ``These steps are important initiatives that ensure borrowers are treated fairly. We look forward to working with Household to initiate further lending improvements."

Household's latest, industry-leading initiatives are designed to extend the positive impact of the groundbreaking practices the company unveiled last July, which included:

-- Reducing the prepayment fee duration from five years to three years on new real estate secured loans;

-- Rescuing victims of predatory lending from foreclosure by providing subsidized interest rates and no-fee loans;

-- Adopting more stringent standards to ensure every real estate loan made has numerous customer benefits;

-- Doubling customers' time to cancel insurance products.

"With two of the oldest and most trusted brands in the consumer lending industry -- HFC and Beneficial -- it has long been Household's commitment to continuously raise the bar in establishing 'best-in-class' lending principles and policies," said William F. Aldinger, chairman and chief executive officer of Household. "This expanded set of responsible lending principles is a continuation of that commitment and we are proud of the meaningful benefits they -- along with the Best Practice Initiatives that came before them -- will provide middle market borrowers."

Initial implementation of the following new best practices is already underway on new loans originated in the company's HFC and Beneficial branches. Full implementation will be complete as soon as systems changes are made and employee training is completed.

Simplified/Improved Disclosures

Improving on its already-comprehensive disclosure process, Household will introduce a one-page disclosure for real estate loans, making it even easier for customers to understand their loan terms and provisions. The new disclosure, written in "plain English" with minimal financial jargon, will provide easy-to-understand information about key loan features such as APR, the total loan amount, the total amount financed, monthly payment amounts, payment due dates, and insurance costs.

Moreover, Household will provide an additional disclosure for borrowers accepting a loan offered via direct mail. Before activating a direct mail loan, customers will be directed to call a toll-free number to receive a "verbal disclosure" that provides detailed information about the terms and conditions of their loan. This is to ensure that all direct mail customers are provided with additional tools and information about the loan terms before they take it.

Household will also continue to encourage customers to review the company's loan closing video and complete a customer satisfaction survey in order to further ensure understanding of the loan terms and conditions. Household's 1-800 customer hotline will continue to be available to customers seeking answers to their questions or concerns.

100% Satisfaction Guarantee

In addition to following federally mandated rescission periods, Household will implement a 100% satisfaction guarantee program on all new HFC and Beneficial branch-originated loans. This guarantee allows borrowers who elect to liquidate the loan -- within 10 days of that loan being made -- to do so at no cost to them.

Prepayment Fee Option

Following on the company's announcement last year to cut the duration of prepayment fees by 40 percent (from five to three years) on new loans, Household will now offer borrowers the choice of accepting a loan with or without a prepayment fee. Household will provide new real estate loan customers the flexibility of choosing between a lower-rate loan with a prepayment fee or a higher-rate loan without a prepayment fee. In addition, Household will waive the prepayment fee on its branch originated real estate loans where 24 consecutive on-time payments are received. Household will also waive the prepayment fee for these loans after 24 months from when the loan is made if the customer sells their home.

Cap on Points and Fees

In an additional effort to provide real estate borrowers with the best products available, Household will cap origination fees on new loans at three percent. Moreover, Household will offer customers the option of utilizing up to two discount points should they elect to buy-down their rate.

Interest Rate Reductions

Household will also begin offering increased rewards to responsible real estate borrowers who make consistent, on-time payments. Further expanding its ``Pay Right Rewards'' program, Household will offer responsible borrowers an interest rate reduction of up to 300 basis points (three percent). Each time a borrower makes 12 consecutive on-time payments they will receive a .25 basis point reduction on their interest rate, for a maximum of 12 total interest rate reductions.

Furthermore, Household customers will now be eligible to receive these awards beginning after only one year instead of three years (as is the case in the current Pay Right Rewards program.) Even if a customer's payment performance falters, the customer will still be eligible for further rate reductions upon re-establishing consistent payment patterns. Also, interest rate reductions previously earned will never be reversed.

Under this expanded program, a typical real estate customer could save tens of thousands of dollars in interest costs over the life of the loan or cut several years off their loan payments.

"Since its founding Household has continued to seek input from respected community groups, government leaders, business partners and, of course, customers on ways to improve the lending products and services the company offers to millions of customers," said Gary Gilmer, vice chairman of Household and president of the company's consumer lending division. "We are particularly appreciative of the advice provided by groups, such as NCRC, as well as our own Consumer Advisory Board. We hope that others in the industry follow our lead and voluntarily set their own equally high standards for responsible lending."

About Household
Household's businesses are leading providers of consumer loan, credit card, auto finance and credit insurance products in the United States, United Kingdom and Canada. In the United States, Household's largest business, founded in 1878, operates under the two oldest and most widely recognized names in consumer lending - HFC and Beneficial. Household is also one of the nation's largest issuers of private-label and general-purpose credit cards, including The GM Card® and the AFL-CIO's Union Plus® card. For more information, visit the company's Web site at www.household.com.