Sanwa taking a different tack on secured cards.

California banks are catching secured card fever, and Sanwa Bank California is the latest bank to feel the heat.

Los Angeles-based Sanwa unofficially offered secured cards to recent United States immigrants for several years. As that demand grew, the bank decided to add secured cards to its list of products.

Sanwa Bank is distinguishing its secured card program from its California competitors' programs, which include Bank of America, Wells Fargo, and First Interstate, by targeting primarily recent immigrants, college students, and senior citizens.

Most secured card programs target people with past credit problems, but Sanwa Bank, which is the largest overseas subsidiary of the Japanese-owned Sanwa Bank Ltd., is not interested in that market segment.

"It was a pricing decision,"' said ChriStine Larson, Sanwa's senior vice president and head of consumer lending, "We would have to charge a higher interest rate," because of the increased risk the bank would be exposed 16 if it solicited people with credit problems.

Sanwa is offering its secured card customers the same rate it gives its best customers who have gold cards. The secured card is priced at 15.9% with a $35 annual fee and a $25 application fee.

The deposit, which secures the line of credit, earns interest at 4%.

After two years of timely payments cardholders become eligible for an unsecured credit card, though the interest rate actually jumps to 17.25% at that time. Sanwa is running ads in local newspapers and promoting its secured card in its 110 branches throughout California. Consumer activist, Gerri Detweiler, who specializes in credit issues, is skeptical about Sanwa's goal of appealing to college students even though she believes it is a noble goal. "I'd be surprised if [Sanwa] signed up a lot of college students," she said, "because they can get an unsecured credit card so easily."

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