Pricing: Chase, Nynex Roll Out Cobranded Calling Card

Some residential telephone customers in New York are getting preapproved offers in the mail for the Nynex Visa card from Chase Manhattan Corp.

Nynex Corp., the Baby Bell company serving New York and New England, announced its cobranding program with Chase in February. Today the New York-based companies are releasing details of the regional offering. The no-fee card will have a 9.9% introductory interest rate for a year, with rebates redeemable for cash or discounts on Nynex phone service.

To lure customers from other cards, Chase Manhattan Bank is offering a 500-point sign-up bonus, plus a point for every dollar transferred up to 10,000. Cardholders can make redemptions when they reach 2,000 points, and at 2,000-point increments thereafter for up to three years. There is no cap on total points.

Nynex Visa customers will be rewarded with a 1% rebate - one point per dollar - on general purchases. In a twist from other regional Bell cobranded offers, cardholders can earn a 25% bonus on the points they've earned in any month when they use a Nynex calling card twice.

At 2,000 points, cardholders can apply the $20 rebate check toward their monthly Nynex phone bill. Or, for the same number of points, they can get a $25 premium when adding a Nynex service such as call forwarding or repeat dialing.

Other Baby Bells have rebates geared to calling card volume but not general spending, said Kevin McCabe, senior vice president for Chase Bankcard Services.

"Depending on the mix, a very heavy calling card user can get a very good reward" from other programs, he said. "But someone who doesn't use it as much and has more general spending would work out better with this card because they've got something that's generally applicable. Plus, they're getting a bonus for the calling card feature - so they're getting both."

Other Baby Bells have offered 10% rebates on local and long-distance calls charged to the credit card, plus 1% to 2% rebates on general purchases.

Anupa Mueller, managing director of Nynex individual communication services, said the Visa card rewards customers for doing something they would do anyway - make phone calls. Nynex will be marketing the card to calling card customers. She said the message is, "You don't have to change a thing . . . do what you've always done."

After 12 months, the introductory interest rate jumps to prime plus 8.4% on the gold version and prime plus 9.4% on the classic version. Cardholders have the option of requesting a MasterCard-branded Nynex card instead of Visa.

Chase and Nynex will issue the card first in New York State, where the telecommunications company has nearly seven million of its 11 million residential telephone subscribers. Pending regulatory approval, the companies said they will expand the program to New England this year.

The companies will market the card through direct mail, take-one displays, Nynex customer service, and a regional television commercial. The TV spot, expected in May, will promote the product as the only card that can give customers money off their Nynex phone service.

Robert B. McKinley, president of RAM Research Corp., Frederick, Md., said the Chase/Nynex card is typical of other regional Bell cobrandings. He expects it to attract 200,000 to 300,000 accounts.

"This card helps (Chase) diversify its portfolio and puts it on a par with most of the major players who have their hands in the cobranding game," he said. "That's a shot in the arm for Chase."

Michael Auriemma, president of Auriemma Consulting Group, Westbury, N.Y., who worked with the parties structuring the deal, said cobranding is the beginning of a deeper relationship. Their opportunities include prepaid cards, home banking, and other interactive services.

"The communications industry is really diversified," the consultant said. "I think that's going to be a huge boon for the banks, or damaging if they're not aligned" with telecommunications partners.

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