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he battle for the consumers' credit-card loyalty rages on, as individual banks steal customers back and forth with fine-print programs offering no-fee, low-interest rate and free gift deals.

The banks are supported in their search for revolving creditholders by an increasing willingness on the part of consumers to enter debt financing. All bank card issuers recorded debt of $440.2 billion at the end of '95, up about 25% from the prior year, according to Credit Card News.

Such growth in revolving credit is abetted by the growing profusion of card issuers and a high success rate in expanding credit-card accounts. By yearend, the top 25 issuing banks recorded 227.5 million accounts in the U.S., up 16.1%, notes CCN.


Aside from the fact this intense credit-card activity is highly profitable to card issuers, the cards deliver customers more hip to virtual banking: Already, credit-card programs are connecting to online banking systems and the Internet as well as adding debit card and smart card features like chip-encoded cards that keep a running tally of transactions.

The most powerful marketing tool for credit-card marketing continues to be telemarketing and direct-mail solicitations, although major-media advertising levels are nothing to overlook.

This year Visa International spent heavily leveraging the Olympic Centennial Games in Atlanta into a yearlong marketing opportunity. Visa's efforts included an estimated $60 million in ad spending on network TV spots, plus heavy on-site marketing. Visa maintains high visibility in many sports, including the National Football League.

MasterCard International's TV advertising under this year's $50 million media account continues to apply humor and allusions to its high-tech capabilities and card security programs. Like Visa, MasterCard is sponsoring more events and venues worldwide, including soccer and golf on a global basis, and in the U.S., the National Hockey League and Nascar auto racing.

MasterCard's strong suit is its lead in co-branding of credit cards.

The No. 1 issuer of affinity MasterCard and Visa cards, MBNA America Bank, hit a peak in 1995 with 747 new affinity card endorsements; the bank by yearend is expected to issue about 500-600 new endorsements, giving it a total of about 4,500. Its affinity cards now include cards linked to the largest colleges and alumni organizations, the National Education Association, all major sporting leagues, the Sierra Club and retailer L.L. Bean.


MBNA is the No. 3 consumer credit-card lender behind leader Citibank and Dean Witter, Discover & Co. Citibank also offers both MasterCard and Visa programs and maintains its Diners Club charge-card franchise, primarily targeting business travelers.

American Express Co. got into the co-branding act this year by issuing Delta SkyMiles Credit Card and ITT Sheraton ClubMiles Card.

The most aggressive credit-card marketers are beginning to reward only customers who maintain credit balances. This year, Citibank added rewards and AmEx launched Membership Rewards, a program offering retail discounts and merchandise to frequent card users that replaces a previous emphasis on mileage points.

In June, AmEx tossed out its three-year-old domestic TV campaign featuring comedian Jerry Seinfeld and its card-specific message to reposition itself as a total financial company.


New TV spots, backed by $80 million to $100 million in spending through yearend, tout the multiple services under the AmEx brand, from credit cards to financial advice, do-it-yourself investments and travel services worldwide.

Dean Witter is building a segmented, global credit-card program after establishing Novus Services, an operating company overseeing a family of credit products that include Discover, Private Issue and Bravo cards.

Celebrities and their custom credit-card designs pop up in ads for Private Issue cards and a heavy direct mail program for Bravo targets consumers who carry balances on their accounts.

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