Taken by itself, the General Motors MasterCard program would make Household International one of the biggest and most influential credit card companies.

But there is far more than that to Household's status. Industry experts say it took a well-rounded portfolio and expert management to propel Household into fifth place among bank card issuers, with receivables totaling $17.5 billion.

The finance company entered into credit cards 16 years ago by acquiring Valley National Bank of Salinas, Calif., with just 15,000 accounts.

In 1985, Household hired Joseph W. Saunders to make something more out of a fledgling card operation with 21 people in an office of 1,500 square feet.

Mr. Saunders, now 51 and heading a 4,500-employee operation, had previously worked in units of Chemical Banking Corp., BankAmerica Corp., and, for 16 years, Continental Illinois Corp.

In 1990, Household Bank became Household Credit Services and with Mr. Saunders as president and chief executive officer, business really began to accelerate.

The launch of the General Motors card in 1992 put Household on the cobranding map with the straightforward proposition that cardholders could apply rebate credits to the purchase of a vehicle. The million accounts signed within a month set a record that still stands.

But Mr. Saunders said it was actually a smaller program with one of the Baby Bell companies, Chicago-based Ameritech Corp., that allowed Household to snag the automaker.

Launched in 1991, the Ameritech card is issued in five states and offers rebates of up to 5% on purchases and calling card transactions.

"There we were - a finance company with a small credit card portfolio - who was going to bank on us?" said Mr. Saunders. The relationship with Ameritech built necessary credibility, he said.

In 1996, Household climbed another step on the ladder of elite issuers by acquiring the AFL-CIO's $3.4 billion Union Privilege portfolio, with 2.2 million accounts - and the right to market cards to all 13 million members of the labor confederation.

Mr. Saunders said the AFL-CIO, Ameritech, and GM deals were all watershed transactions. And there are other cobranding partnerships with Pacific Bell and US West.

Matthew Burnell, a bond analyst for Merrill Lynch in New York, said Household was obviously pursuing a consolidation strategy through both private-label and bank card acquisitions. The company has performed well, he said, having developed the skills necessary to integrate acquisitions.

Mr. Saunders said purchasing portfolios might be smart at times, but at other times it might be more prudent to strike up partnerships. Household is prepared for either eventuality, while also going the conventional direct mail route.

"It is a competitive, market-driven business and you have to have as many ways to source accounts as possible," said Mr. Saunders.

"Diversification is important, but there are organizations that don't have as much diversification as Household that are just as successful, said Frank Caruana, director of marketing systems for Scottsdale, Ariz.-based Danielian Consulting Group. What sets Household apart, he said, is a clear vision and a consistent business model.

Now the issuer is taking aim at the corporate market.

Household is already fourth in this category, with 250,000 cards, in part because it has been operating corporate card programs for General Motors and Ameritech. In 1995, Household launched a cobranded corporate MasterCard for Carlson Wagonlit Travel. Mr. Saunders said the Carlson effort, which targets multinational companies and their travel and payment needs, assures that Household will be a major competitor in the corporate market.

The company's road, even in the cobranding market it knows best, has not always been smooth. Like other card issuers, Household has had to rethink some cost structures. In January, it offered some of the million Ameritech cardholders the option of forgoing their grace periods in return for higher rebates. Consumer advocates criticized it because cardholders would have to pay more interest to get more rebates.

In July, several marketing partners were cut from the 10 million-card GM program because the companies said few people were using the benefits.

But Mr. Saunders hinted that Household would revitalize the GM card with new product features in the next two months.

"Ford's pulling out of the business is an opportunity for us," said Mr. Saunders, alluding the discontinuation of the cobranding venture of General Motors' rival with Citibank. "We and GM are solidly behind the card and intend to vigorously promote it."

Industry observers don't doubt Mr. Saunders, whom they praise for his leadership and accomplishments. His stature may even be increasing now that he is chairman of the MasterCard International board.

"If you look at the card industry today, you can see Joe's imprint by the people who have served under him and who are making their own impact on the industry," said Robert K. Hammer, chairman and chief executive officer of R.K. Hammer Investment Bankers, Thousand Oaks, Calif.

Mr. Hammer said Mr. Saunders encourages people do exciting things within risk-management parameters.

Mr. Burnell of Merrill Lynch said a prime example of Household's ability to innovate is the deal Household made to acquire some of Barnett Banks Inc.'s portfolio and provide outsourcing support for the accounts that the Jacksonville, Fla., company wanted to retain and control.

It indicates that more and more second-tier credit card banks will find it hard to stay competitive with fast-moving giants, Mr. Burnell added.

Mr. Saunders said Household would be mining data bases to increase the card business under its own brand, and is open to relationships with large affinity groups.

"There are a slew of good people working here and they are all focused and motivated, said Mr. Saunders. "Collectively, we will have victories and some defeats," he said. "But if I wake up and look in the mirror and think I can't do better than what I did yesterday, then I won't come to work."

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