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                                                                    EXHIBIT 10.7
                            HOUSEHOLD INTERNATIONAL

                        DEFERRED FEE PLAN FOR DIRECTORS

     Section 1.  Purpose.  The purpose of the Household International Deferred
Fee Plan (the "Plan") is to provide non-management directors (the "Directors")
of Household International, Inc. (the "Company") the opportunity to defer
receipt of cash compensation paid by the Company to such person in their role as
a Director. The Plan is designed to aid the Company in attracting and retaining
as members of its Board of Directors persons whose abilities, experience and
judgment can contribute to the well-being of the Company.

     Section 2.  Effective Date.  The effective date of this Plan is January 10,
1995. The Plan was subsequently amended on September 8, 1997 and September 1,
1999.

     Section 3.  Eligibility.  Any Director of the Company who is not deemed to
be an employee of the Company or any subsidiary thereof is eligible to
participate in the Plan.

     Section 4.  Deferred Compensation Account.  Except as may be required in
accordance with Section 11 hereof, an unfunded deferred compensation account
(the "Account") shall be established for each Director who elects to participate
in the Plan.

     Section 5.  Amount of Deferral.  A participant may elect to defer receipt
of all or a specified part of the compensation payable to the participant for
serving on the Board of Directors or committees of the Board of Directors of the
Company or any of its subsidiaries. An amount equal to the compensation
deferred, as reflected in the election referred to in Section 6 hereof, will be
credited to the participant's Account, in the form of cash (the "Cash
Component") or phantom Company Common Stock units (the "Stock Component"), on
the date such compensation would otherwise be initially payable.

     Section 6.  Time of Election of Deferral.  Except as set forth herein, an
election to defer compensation shall be made on an annual basis on or before
December 15th of each year on forms approved for that purpose and shall be
effective when filed with the Secretary of the Company with respect to all
compensation, or any part thereof so elected to be deferred, that is paid in the
calendar year following the calendar year in which the election is made. For the
year 1995, the election shall be made prior to January 30, 1995, and shall be
effective when made with respect to any compensation to be paid in the period
January 30, 1995 through December 31, 1995. In the case of newly elected
Directors who first become eligible to participate in the Plan subsequent to
January 1 of any calendar year, such newly

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eligible participant shall be entitled to make an election to defer compensation
for services to be performed subsequent to the election provided such election
is made within 30 days after the date such Director becomes eligible. In this
case, such election shall be effective when made with respect to any
compensation to be paid during the period beginning with the date following the
date of the election through December 31 of the same initial year of
participation.

     Section 7.  Hypothetical Investment.  Each Account may have a Cash
Component, a Stock Component or a combination of both and will be credited on
each date compensation is to be paid to Directors with:

     (1)  if the compensation is to be placed in the Cash Component, the amount
          elected to be deferred plus interest from the date on which the
          deferred compensation that is credited to the Cash Component would
          initially have been payable, until payment, at a rate equal to the
          United States five-year treasury rate plus HFC's borrowing spread over
          that rate on the first day of each calendar quarter in which such
          interest is credited to the participant's Account with interest
          compounded quarterly, or

     (2)  if the compensation is to be placed in the Stock Component, the amount
          elected to be deferred will be used to purchase phantom units of the
          Company's Common Stock (including fractional shares) using the fair
          market value of such Common Stock on the date the compensation would
          otherwise be paid. The Stock Component will be credited on each
          dividend payment date for the Company's Common Stock with additional
          phantom Common Stock units determined by dividing the aggregate cash
          dividend which would have been paid if the existing phantom Common
          Stock units were actual shares of the Company's Common Stock by the
          fair market value of the Company's Common Stock as of the dividend
          payment date, computed to four decimal places. For purposes of the
          Plan, the "fair market value" of one share or unit of the Company's
          Common Stock shall be the average of the high and low sale prices for
          a share of such Common Stock as published in The Wall Street Journal
          for the respective determination date.

     Section 8.  Value of Deferred Compensation Accounts.  The value of each
participant's Account shall include compensation deferred and interest or
dividends credited thereon, pursuant to Section 7 of the Plan. All deferred
amounts to be paid to a participant pursuant to the Plan are to be paid as soon
as practicable following the payment date, with the value of the phantom Common
Stock units being the fair

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market value of an equal number of shares of the Company's Common Stock on the
date of payment.

     Section 9.  Payment of Deferred Compensation.  No withdrawal may be made
from the participant's Account prior to the date specified by the participant in
his or her election to defer compensation except as provided in Section 10. At
the participant's election, deferral of compensation may be made to a specific
date, to immediately after the end of the calendar year in which the participant
terminates service as a Director, or to the earlier of either one of such dates.
Any deferral must be for a period of at least two years following the year for
which the compensation is earned, unless service as a Director terminates
earlier. Deferred compensation and interest or dividends (including appreciation
or loss) thereon will be payable in cash from the Cash Component or shares of
Household Common Stock, $1.00 par value, from the Stock Component either in a
lump sum or in such number of quarterly or annual installments as the
participant chooses, subject to the participant's right to change such method of
distribution no later than twelve months prior to the first date deferred
compensation is to be paid. If a participant elects to receive payment from his
or her Account in installments, the participant's Account will continue to
accrue interest or dividends (and appreciation or loss) during the installment
period. Payments made from the Account shall first be made from the Stock
Component of the Account until such Component has been reduced to zero, and then
from the Cash Component. Interest or dividends credited to a participant's
Account during the installment period will be paid on the next installment
payment date.

     Section 10.  Hardship.  In the event of a substantial, unforeseen hardship,
a participant may file a notice with the Secretary of the Company to be
presented to the Compensation Committee of the Board of Directors, advising the
Committee of the circumstances of the hardship, and requesting a withdrawal of
previously deferred amounts, or, where a former Director is receiving annual
installment payments, requesting accelerated payment. The Committee, in its sole
discretion, may agree to accelerate distribution of all or a part of amounts
previously deferred. Should the Committee agree, such distribution shall occur
on a date set by the Committee (the "Hardship Distribution Date") that is at
least six (6) months from the date the Committee approves the hardship
withdrawal request. The Committee shall determine, in its sole discretion, how a
current participant's Cash Component and Stock Component shall be charged for
the withdrawal. No member of the Committee may vote on, or otherwise influence a
decision of the Committee concerning his or her request for a hardship
withdrawal. A hardship withdrawal by a participant shall have no effect on any
amounts remaining in the participant Account, and shall not have any effect on
any current or future deferral election after the

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hardship withdrawal.

     For purposes of this paragraph, a substantial unforeseen hardship is a
severe financial hardship resulting from extraordinary and unforeseeable
circumstances arising as a result of one or more recent events beyond the
participant's control. To the extent such hardship is or may be relieved (i)
through reimbursement or compensation by insurance or otherwise, (ii) by
liquidation of the participant's assets, to the extent the liquidation of such
assets would not itself cause a financial hardship, and (iii) by cessation of
deferrals under the Plan, accelerated payment may not be made. Withdrawals of
amounts because of an unforeseen hardship may only be permitted to the extent
reasonably necessary to satisfy the hardship. Examples of what are not
considered to be unforeseeable hardships include the need to send a
participant's child to college, or the desire to purchase a home.

     Section 11.  Change in Control.  A "Change in Control" shall be deemed to
occur when and it:

     (a)  Any "person" (as defined in Section 13(d) and 14(d) of the Securities
          Exchange Act of 1934, as amended (the "Exchange Act")), excluding for
          this purpose the Company and any subsidiary of the Company, or any
          employee benefit plan of the Company or any subsidiary of the Company,
          or any person or entity organized, appointed or established by the
          Company for or pursuant to the terms of such plan which acquires
          beneficial ownership of voting securities of the Company, is or
          becomes the "beneficial owner" (as defined in Rule 13d-3 under the
          Exchange Act) directly or indirectly of securities of the Company
          representing twenty percent (20%) or more of the combined voting power
          of the Company's then outstanding securities; provided, however, that
          no Change in Control shall be deemed to have occurred as the result of
          an acquisition of securities of the Company by the Company which, by
          reducing the number of voting securities outstanding, increases the
          direct or indirect beneficial ownership interest of any person to
          twenty percent (20%) or more of the combined voting power of the
          Company's then outstanding securities, but any subsequent increase in
          the direct or indirect beneficial ownership interest of such a person
          in the Company shall be deemed a Change in Control; and provided
          further that if the Board of Directors of the Company determines in
          good faith that a person who has become the beneficial owner directly
          or indirectly of securities of the Company representing twenty percent
          (20%) or more of the combined voting power of the Company's then
          outstanding securities has inadvertently reached that level of
          ownership interest, and if such person

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          divests as promptly as practicable a sufficient amount of securities
          of the Company so that the person no longer has a direct or indirect
          beneficial ownership interest in twenty percent (20%) or more of the
          combined voting power of the Company's then outstanding securities,
          then no Change in Control shall be deemed to have occurred; or

     (b)  During any period of two (2) consecutive years (not including any
          period prior to September 1, 1999), individuals who at the beginning
          of such two-year period constitute the Board of Directors of the
          Company and any new director or directors (except for any director
          designated by a person who has entered into an agreement with the
          Company to effect a transaction described in subparagraph (a), above,
          or subparagraph (c), below) whose election by the Board or nomination
          for election by the Company's shareholders was approved by a vote of
          at least two-thirds of the directors then still in office who either
          were directors at the beginning of the period or whose election or
          nomination for election was previously so approved, cease for any
          reason to constitute at least a majority of the Board (such
          individuals and any such new directors being referred to as the
          "Incumbent Board"); or

     (c)  Consummation of (1) an agreement for the sale or disposition of the
          Company or all or substantially all of the Company's assets, (2) a
          plan of merger or consolidation of the Company with any other
          corporation, or (3) a similar transaction or series of transactions
          involving the Company (any transaction described in parts (1) through
          (3) of this subparagraph (c) being referred to as a "Business
          Combination"), in each case unless after such a Business Combination
          (x) the shareholders of the Company immediately prior to the Business
          Combination continue to own, directly or indirectly, more than sixty
          percent (60%) of the combined voting power of the then outstanding
          voting securities entitled to vote generally in the election of
          directors of the new (or continued) entity (including, but not by way
          of limitation, an entity which as a result of such transaction owns
          the Company or all or substantially all of the Company's former assets
          either directly or through one or more subsidiaries) immediately after
          such Business Combination, in substantially the same proportion as
          their ownership of the Company immediately prior to such Business
          Combination, (y) no person (excluding any entity resulting from such
          Business Combination or any employee benefit plan (or related trust)
          of the Company or of such entity resulting from such Business
          Combination) beneficially

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          owns, directly or indirectly, twenty percent (20%) or more of the then
          combined voting power of the then outstanding voting securities of
          such entity, except to the extent that such ownership existed prior to
          the Business Combination, and (z) at least a majority of the members
          of the board of directors of the entity resulting from such Business
          Combination were members of the Incumbent Board at the time of the
          execution of the initial agreement, or of the action of the Board,
          providing for such Business Combination; or

     (d)  A tender offer is made for thirty percent (30%) or more of the
          Company's Common Stock, which tender offer has not been approved by
          the Board of Directors of the Company; or

     (e)  Approval by the shareholders of the Company of a complete liquidation
          or dissolution of the Company.

     Notwithstanding any other provision of the Plan, if a Change of Control
occurs, then the Company shall create a trust or take such other actions as are
appropriate to protect each participant's Account.

     Section 12.  Designation of Beneficiary.  A participant may designate a
beneficiary or beneficiaries which shall be effective upon filing written notice
with the Secretary of the Company on the form provided for that purpose. If no
beneficiary is designated, the beneficiary will be the participant's estate. If
more than one beneficiary statement has been filed, the beneficiary or
beneficiaries designated in the statement bearing the most recent date will be
deemed the valid beneficiary or beneficiaries.

     Section 13.  Death of Participant or Beneficiary.  In the event of a
participant's death before he or she has received the full value of his or her
Account, the then current value of the participant's Account shall be determined
as of the day immediately following death and such amount shall be paid to the
beneficiary or beneficiaries of the deceased participant as soon as practicable
thereafter in cash in a lump sum. If no designated beneficiary has been named or
survives the participant, the beneficiary will be the participant's estate.

     Section 14.  Participant's Rights Unsecured.  The right of any participant
or beneficiary to receive payment under the provisions of the Plan shall be an
unsecured claim against the general assets of the Company, and no provisions
contained in the Plan shall be construed to give any participant or beneficiary
at any time a security interest in the Account or any other assets of the
Company.

     Section 15.  Statement of Account.  Statements will be sent to participants
following the end of each year as to the

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value of their Accounts as of December 31 of such year.

     Section 16.  Assignability.  No right to receive payments hereunder shall
be transferable or assignable by a participant or a beneficiary, except by will
or by the laws of descent and distribution.

     Section 17.  Administration of the Plan.  The Plan shall be administered
by the Compensation Committee of the Board of Directors of the Company. The
Committee shall conclusively interpret the provisions of the Plan and shall make
all determinations under the Plan. The Committee shall act by vote or written
consent of a majority of its members.

     Section 18.  Amendment or Termination of Plan.  This Plan may at anytime or
from time to time be amended, modified or terminated by the Board of Directors
of the Company. No amendment, modification or termination shall, without the
consent of a participant, adversely affect such participant's accruals on his or
her prior elections.

     Section 19.  Governing Law.  This Plan shall be governed by and construed
in accordance with the laws of the State of Illinois.

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