AOL Card from 1st USA Offers Time as a Bonus

First USA Inc. and America Online Services Co. has launched a cobranded card that offers Internet users a break on browsing.

America Online Visa is the first cobranded card to offer on-line rebates, and industry consultants say it will serve a growing niche.

By signing up for the card, customers get 10 free hours with America Online, as well as two rebate points for every dollar charged on-line and one point for every other dollar spent.

After accumulating 200 points, users qualify for one free hour on-line. After 1,000 points, the $9.95 monthly service fee for five hours on-line is waived, and 2,000 points gives the cardholder 20 free hours.

James Stewart, executive vice president of partnership marketing for First USA, said the Dallas-based bank is advertising the card through direct mail and on America Online, the popular Internet service provider.

"We're very excited about this partnership. America Online is one of the leading companies of the '90s," he said.

First USA Paymentech has been America Online's merchant processor for two years, Mr. Stewart said.

The Dulles, Va.-based on-line service is the largest in the United States, with six million customers worldwide.

Ted Leonsis, president of America Online, said the time is ripe for an on-line credit card with rebates.

"We've seen a change in the (America Online) demographic over the last two years. We're a bit older, a bit wealthier, a bit more married with children," he said. "The family is looking for value and our research shows that they do a lot of in-house shopping."

He said the average America Online family of four earns about $70,000 a year.

Michael Auriemma, president of Westbury, N.Y.-based Auriemma Consulting Group Inc., said those demographics make "great credit card prospects."

He said other on-line card programs were not as attractive: "Compuserv missed the boat with a card that doesn't offer free hours."

The Compuserv Visa, which came out last year from Block Financial Corp., and the WebCard Visa, marketed earlier this year through Columbus Bank and Trust Co., offer no rebates.

Some credit card industry consultants were less optimistic about the new card.

Frank Caruana, director of marketing systems, Danielian Consulting Group in Scottsdale, Ariz., said the card was "very problematic."

He said consumers now have too many cobranded cards in their wallets, and they may favor cards that give more concrete rebates for cars and airline tickets.

"These new cobranded opportunities are too narrowly focused, " he said. "How many of these people would want to use the card to get more time on-line?"

James L. Accomando, president of Accomando Consulting Inc. in Fairfield, Conn., said the America Online population interested in this card "is narrow today." But, he said, First USA will be able to build on that base, because "the universe of America Online is quite extensive."

The America Online Visa card has no annual fee. Its 6.9% introductory annual percentage rate jumps to 17.9% after six months.

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