Newspaper article THE JOURNAL RECORD

Credit Card Issuers Now Push Prestige Platinum Version

Newspaper article THE JOURNAL RECORD

Credit Card Issuers Now Push Prestige Platinum Version

Article excerpt

NEW YORK -- Now that everybody has gold in their wallet, credit card issuers are pushing platinum.

Eager to attract status-conscious consumers, companies such as MBNA Corp., First USA Inc., Advanta Corp., Providian Financial Corp. and Citicorp are stuffing mailboxes with applications for cards boasting a more precious coating as gold loses its luster. Borrowers are being enticed by credit limits of up to $100,000 and perks, all for no annual fee.

Though millions of Americans have responded to the new pitch, analysts say issuers should be more selective with platinum than they were with gold cards, and target top-tier customers who will pay fees in return for travel and other services. "It's a huge missed opportunity," said David Berry, a bank analyst at Keefe, Bruyette & Woods. "The point of this concept is selling prestige. In the end they're just `plain vanilla' and no different from gold cards." Card marketing evolved over the last decade, with issuers clamoring for the next gimmick to boost business. Companies such as AT&T, Shell Oil and General Motors introduced cards that tap brand loyalty. Banks and issuers MasterCard and Visa introduced gold cards in the 1980s to improve on standard cards and match rival American Express Co.'s gold charge card. For years, issuers upgraded favored customers to prestigious gold cards. Now, about 2 billion card solicitations reach American consumers annually. "Gold cards have been devalued. All you have to do is fog up a mirror and you get one," said Bruce Brittain, president of an Atlanta-based credit card marketing consulting firm. "Eventually that will be the case with platinum." Platinum mailings are already surging. In the first quarter, U.S. bank issuers mailed 120 million platinum card applications, 12 times as many as the same period last year, according to BAI Global, a Tarrytown, N.Y. market research firm. So far, platinum appears to be on target. Wilmington, Del.-based MBNA, the first bank to mass-market platinum MasterCard and Visa cards last year, said it attracted 6 million customers and $7 billion in loans in just 18 months. The company also introduced the card to U.K. consumers. MBNA, the second-largest U.S. issuer, is best known for card programs that appeal to interest groups and professional organizations. Today the bank has agreements with 4,500 groups, 1,000 of which are professional groups like lawyers and doctors. "We wanted to offer something different. They were all getting gold cards," said John Cochran, MBNA vice chairman and chief marketing officer. The other platinum leader, Dallas-based First USA, issued 6 million platinum cards since last June. First USA was acquired by Banc One last month. Together First USA and MBNA control most of the platinum market. Bank platinum cards offer gold card services such as auto rental insurance, lowest-price guarantee and purchase protection. …

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