credit card to homeowners and homebuyers. The Minneapolis-based company is offering the card to homebuyers who apply for a Knutson mortgage or are refinancing their home loans. "We want our customers to be with us for life, and we will go to whatever extent we have to to ensure that," said Diane DeMarco, vice president, marketing communications for Knutson. In addition to a low rate and no fee, Knutson is dangling one benefit to cardholders that might set it apart from other mortgage companies. Cardholders can charge their credit report and appraisal fees to the no- fee standard or gold cards instead of having to pay in cash up-front. Traditionally, mortgage companies have not allowed homebuyers to charge application fees to a credit card. Knutson estimates that a consumer getting a loan of $100,000 incurs an average of $300 in application fees. Knutson solicited 78,500 of its 120,000 customers in August, said Mark Landschulz, senior vice president of consumer products. The card became available in September. Visas and MasterCards are also being offered through 27 Knutson mortgage originators in the Central and Mountain States. "First USA is very active in the credit card partnership area, and although this is not the first time that we have partnered with a mortgage institution, the agreement gave us the opportunity to customize a product that would meet Knutson's needs," said George McCane, a spokesman for the Dallas-based company Capstead Mortgage, Dallas, markets a cobranded card program with First USA. "From the bank's standpoint, it is a safe, conservative portfolio," said James L. Accomando, president, Accomando Consulting Inc. in Fairfield, Conn. "It's cheaper and more effective than direct mail to target mortgage customers that you know already are creditworthy," he added. The card is available at an introductory interest rate of 5.9%, which jumps to a fixed 15.9% after five months. "This could be a continuation of what First USA has been very good at - identifying upscale customers with better incomes and better records of repayment to whom they can offer low rates to," said Jeff Baxter, principal of the Baltimore-based consulting firm S.J. Baxter & Associates. Though this is Knutson's first entry into the credit card market, Ms. DeMarco said the company is looking at other financial products to facilitate the homebuying process for its customers. Knutson is owned by Chase Capital Partners, the investment group Goldner, Hawn Johnson & Morrison, and its own officers and directors.

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