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No. 1 retailer Wal-Mart Stores waited until long after most competitors had launched co-branded or affinity credit cards before unveiling the Wal-Mart MasterCard in October, a co-branded credit card offered through Chase Manhattan Bank.

True to its brand image, Wal-Mart's no-frills credit card offered basic value with zero annual fee and a fixed "everyday low" interest rate of 14.48% on purchases, about three points lower than the average annual interest rate on most credit cards.

The card was right on the money; in its first seven months, Wal-Mart MasterCard became the fastest-growing card in No. 5 credit card marketer Chase's portfolio with 1.2 million cards in circulation. It has won thousands of customers away from other fee-based cards.

"We simply gave customers what they asked for, a straightforward credit card," says Peggy Knight, who as Wal-Mart's director of specialty marketing supervised the retailer's involvement with the credit card.

Jointly marketed by Chase Manhattan and Wal-Mart, the card is promoted in network and spot TV commercials in Wal-Mart's usual advertising style, using folksy employee testimonials to explain why the card makes sense. Wal-Mart's general ad agency, GSD&M, Austin, Texas, handles.

Wal-Mart's huge customer base provided an instant market share boost for No. 2 MasterCard International in its fierce competition with archrival Visa USA.

But Wal-Mart wasn't simply following its competitors when it entered the co-branded credit card arena. Analysts say Wal-Mart, an aggressive cost-cutter, will use its relationship with MasterCard to get better deals in the tug-of-war over credit- and debit-card transaction costs.

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