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The normally tame Citicorp Diners Club charge card has decided it's time to get tough with rival American Express Co.

In an aggressive new ad campaign, Diners Club throws mud at AmEx's recently renamed Membership Rewards frequent usage points program, targeting the business traveler sector hotly pursued by both companies.

"If your rewards program is missing two major airlines, it's probably still green," said a page ad from Foote, Cone & Belding, Chicago, that ran in major newspapers last week; the American Express Green charge card is also featured in the ad.

United Airlines and American Airlines are the two excluded from AmEx's Membership Rewards program, although the Diners Club's ad doesn't use their names. Instead, Diners Club explains its charge card "turns dollars into miles on every major airline....and the miles never expire."

AmEx-which renamed its Membership Miles frequent traveler program to Membership Rewards this fall-has never offered frequent usage points good on United or American, and it has no separate frequent traveler program specifically targeting business travelers.

Diners Club is merely an annoyance to AmEx, which claims 37 million cardholders from a much broader base that includes many business travelers; Diners Club has only 7 million cardholders. AmEx wouldn't say whether it plans to respond in its own ads to Diners Club's attacks.

But as competition heats up among credit card issuers using travel perks and rewards as incentives, Diners Club's survival may depend upon making more aggressive marketing moves in order to keep its footing in its core business traveler arena.

"Diners Club has been an also-ran for years....This tactic suggests desperation," said Richard Barlow, president of Frequency Marketing, a Cincinnati consultancy.

Diners Club, which says its cardholder base grew 11% this year, scoffs at that description. "We have the cream of the crop of business travelers, and cardholders know it. We just want to point out where AmEx is making nonsensical claims about its rewards program, which is very weak compared to ours," said Walter Sanders, VP-corporate communications.

Diners Club annually spends less than $10 million on advertising, but Mr. Sanders said the company plans to turn up the heat in 1996 with "more strategic and aggressive" ads, although it won't necessarily spend more.

Besides accumulating 1 frequent-flier mile for each dollar spent on travel on all airlines, Diners Club's Club Rewards also lets consumers earn points through dining and lodging expenditures.

AmEx's program offers one point per dollar spent on Delta Air Lines, USAir, Continental Airlines, Southwest Airlines, Aeromexico and Mexicana; AmEx also has relationships with other airlines.

Under its new name, the program also offers points good toward discounts on merchandise at a limited number of retailers.

AmEx said Membership Rewards targets a broad audience of all AmEx cardholders, and the company negotiates travel discounts directly with corporations that are more cost-effective than individual business travel perks.

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