Newspaper article THE JOURNAL RECORD

Shell Joins Chemical Bank in Marketing Credit Card

Newspaper article THE JOURNAL RECORD

Shell Joins Chemical Bank in Marketing Credit Card

Article excerpt

By Agis Salpukas

N.Y. Times News Service

NEW YORK _ The Shell Oil Co. and the Chemical Bank will offer a joint Mastercard on Nov. 1 under which drivers will be able to save 3 percent when they buy Shell gasoline or 2 percent on other purchases for rebates of up to $70 a year on Shell gasoline purchases.

After they reach $70 a year in savings, customers could then get only 1 percent off their purchases of Shell gasoline.

The move is the largest yet by an oil company, many of which have increasingly been allowing their customers to use what are called "co-branded" bank cards _ that is jointly sponsored cards _ to buy gas.

Robert K. Heady, publisher of the Bank Rate Monitor, of North Palm Beach, Fla., said that sponsors of co-branded credit cards, including General Motors, AT T and General Electric, "are trying to create more brand awareness and move more products" by offering rebates or other incentives. "The upshot for consumers is that it is putting downward pressure on rates," he said, but it is also adding to saturation and confusion.

With General Motors cards, users can get 10 percent off the purchase of new GM cars; with AT T users can get a 10 percent discount on long-distances calls, and General Electric cards offer rebates at a variety of stores. In addition, GM has teamed up with some partners, including Mobil, for additional rebates.

Studies have shown that the average household credit card user buys about $3,000 a year on credit cards. Thus, Shell estimated that the typical user's gasoline rebates could be about $60 to $70 a year, provided the card is used not only for gas but also for most other credit card purchases.

However, Heady cautioned, consumers should look beyond the rebates and compare cards' annual fees, interest rates and grace periods on purchases in deciding which cards to use. Cards with no annual fees are best for customers who pay off their charges each month, he said, while those with low interest rates are best for people who carry balances.

With the Shell-Chemical card, there is no annual fee for the first year for those who sign up before April 30, 1994, and the annual fee will be waived thereafter if the card is used at least six times a year. The initial interest rate will be 15 percent _ prime rate plus 9 percent. …

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