Academic journal article ABA Banking Journal

Who's Afraid of the General Motors Card?

Academic journal article ABA Banking Journal

Who's Afraid of the General Motors Card?

Article excerpt

Citicorp and Ford have high hopes of outdoing the General Motors credit card with their new similar card. This is an ambitious goal--on March 1, GM had 3.4 million holders of the card it introduced Sept. 10.

Citi and Ford are sending direct mail solicitations to Citi's 30 million existing cardholders and to Ford car owners and potential car owners. They are running television, radio, and newspaper advertisements created by J. Walter Thompson, Chicago, through July. Citi and Ford have put card applications in 5,000 dealerships and promotional material in the window of every new car, van, and light truck from Ford and Lincoln-Mercury.

The marketing theme is "It's a Better Idea." According to Citi, the Ford card is better than the GM card because the annual percentage rate for new cardholders is lower [it is prime p us 9.4%). For existing Citi cardholders rates range between 13.4% and 19.8%, based on the person's credit record. Further, the 5% rebate on all purchases made with the card (which has a cap of $700 per year and $3,500 total) s faster, according to Citi. The rebate, which has a five-year limit, can be applied to the purchase or lease of any Ford or Lincoln|Mercury car or light truck. The customer calls a toll-free number for a rebate check after negotiating the car price. …

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