In the past two weeks at least 60,000 college students have completed applications for a new credit card, its sponsors say.
Bank of Hawaii and Contiki, a Garden Grove, Calif.-based tour operator that specializes in the youth market, have begun peddling a Visa card that offers rebates on vacations.
Card purchases earn a 5% rebate that can be applied toward the price of a Contiki vacation in Africa, Europe, Australia, New Zealand, and the United States.
The card was introduced within days of rival First Hawaiian Bank's launch of a travel card.
Both banks are promoting their cards to people on the mainland for the first time, hoping to lure customers with travel-related benefits.
Harvey Egna, vice president of Bank of Hawaii, said travel-oriented credit cards are becoming increasingly popular.
Credit card consultant Frances M. Dale, president of Entandem Inc., said that at least three other vacation cards are in development.
Some of the cards will likely promote a particular state or locale, said Ms. Dale. MBNA Corp., for example, issues the Bermuda Club Visa card, which offers discounts for using the card at certain hotels, restaurants, and shops in Bermuda.
The Hawaiian competitors' products are distinctly different.
First Hawaiian Bank is targeting an upscale market of frequent travelers to Hawaii, offering discounts on vacation packages sold by Hawaii Classic, a tour operator.
By contrast, Bank of Hawaii wants to attract less affluent college students who, according to industry research, will likely be loyal long- term customers. Bank of Hawaii is hoping to provide students with their first credit card, and in return secure their loyalty over time.
"We see a growth opportunity in the college market as we follow students through their careers," said Mr. Egna.
The bank expects to add 150,000 accounts in the first year. But it doesn't anticipate a dramatic increase in the bank's $260 million of receivables, because credit lines will be limited to $500 to $2,500.
The Contiki Visa card has a 11.9% introductory rate and defers the $18 annual fee for the first six months. Thereafter, the interest rate goes up to the prime rate plus 9%.
In addition to the 5% rebate, cardholders receive $100,000 of travel insurance and 30 minutes of free calling card time if they subscribe to LCI International, a long distance telephone service provider. Also, cardholders must earn the equivalent of at least 10% of the price of a Contiki tour before they are allowed to redeem their rebate.
