By Kantrow, Yvette D.
American Banker , Vol. 156, No. 117
Ford to Offer Customers Free Bank Credit Cards
NEW YORK -- Ford Motor Co., already a major force in the credit card business, is planning to offer free MasterCard and Visa cards to consumers who have bought its automobiles in the past three years.
The card being introduced this week carries an introductory annual percentage rate of 15.9% and gives cardholders rebates on purchases. If it is well-received, Ford will make it widely available to the public, the automaker said Monday.
Ford will issue the card through a unit of its finance affiliate, Associates National Bank, Pleasanton, Calif. Associates already has more than three million bank cards outstanding, making it the nation's 11th-largest issuer.
First Since AT&T
Associates' newest offering is the first to sport the automaker's logo. The move makes Ford the latest nonbanking company to launch, or attempt to launch, a co-branded MasterCard or Visa card since American Telephone and Telegraph Co. introduced the Universal card last year.
The bank-owned card associations have since taken steps to limit further inroads by non-banking companies such as Sears, Roebuck & Co. and General Motors. But there is little they can do to stop Ford, which bought Associates in 1989.
Rules Have Been Tightened
Ford also has a presence in the credit card business through First Nationwide Bank, a California thrift purchased in the early 1980s.
Both MasterCard and Visa have tightened the rules governing affinity marketing programs following AT&T's success. Visa has taken a particularly harsh stance and recently extended a moratorium on new nonbank members through October. …