Two card issuers have begun offering sizable cash rebates for Internet purchases.

The companies, First USA and Discover, both say they are trying to generate loyalty among Internet users and eventually take advantage of the often-predicted explosion of electronic commerce.

First USA, a Bank One Corp. subsidiary, introduced e.Card, a platinum Visa that gives 5% cash back for on-line purchases at participating merchants.

The card has no annual fee and First USA's standard 9.99% interest rate.

Cardholders can view statements, pay bills, and contact customer service on-line.

"As e-commerce increases, it only makes sense for First USA to offer a credit card product that provides the on-line consumer with increased value and guaranteed security while shopping on the Internet," said James W. Stewart, executive vice president for partnership and Internet marketing at First USA.

Retailers in the program include Amazon.com, Cosme-ticsCounter.com, eToys.com, and FlowersUSA.com. Other on-line merchants will be added, said a First USA spokesman.

The Wilmington, Del., company is out to make a strong imprint on the Internet. It issues cobranded cards with America Online and Yahoo and has a marketing deal with Microsoft's MSN Network.

The other company promising cash back for Internet purchases, Morgan Stanley Dean Witter & Co., already offers such a feature with its flagship Discover card.

Through a new Internet shopping link called Discover ShopCenter, cardholders can get discounts and cash-back awards from the likes of FAO Schwarz, Eddie Bauer, Hickory Farms, and Discover Brokerage Direct.

Benefits range from 15% off purchases to a $50 cash bonus.

Discover cited a study by Jupiter Communications of New York, which said that 77% of Internet users would begin to buy products on-line if they could find deeper discounts.

"We're constantly looking at all the research out there and using it for input in our strategies," said Daniel E. Lifka, director of electronic commerce at Discover.

The Riverwoods, Ill., company chose merchants with familiar names that were willing to offer discounts, Mr. Lifka said.

"We know that our card members are on-line, and we're looking to be in the places our card members are at," said Joseph Bonefas, vice president of technology products at Discover. "We're looking for new e-commerce ways to add value."

Card companies are working hard to find new ways to reach potential customers, many of whom already carry four or five cards in their wallets.

Many card executives say the Internet is a great advertising vehicle for them, even as the public seems to be embracing on-line shopping slowly.

"Many credit card brands and banks have started to recognize the need for strong incentives to drive more transactions into this channel," said Scott Smith, an electronic commerce analyst at Current Analysis in Sterling, Va.

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