First National Bank of Commerce signed a contract to issue and process proprietary credit cards for the U.S. Air Force.

Previously, the New Orleans-based bank, the lead bank of First Commerce Corp., handled the Air Force's card needs for 14 bases. The latest contract, however, expands the five-year-old relationship to all of the 88 bases in the United States.

The credit cards allow military men and women to purchase goods and services that are offered on the bases.

Such items and services, which are not subsidized with taxpayer money, could include library dues and fees associated with day care centers, health clubs, and other recreational activities.

"Congress and the Defense Department have been working diligently to improve the services that the military forces offer, so that they operate in a businesslike fashion," said Howard C. Gaines, chairman of the bank.

Mr. Gaines believes that First National's contract reflects the Air Force's need to run its private services more efficiently and to comply with the clear message from Capitol Hill.

The contract will save the military approximately $50 million over 10 years, according to Mr. Gaines' estimates.

First Commerce, which issues credit cards primarily in Louisiana and some neighboring states, expects to significantly boost its current card portfolio of 500,000 accounts and $425 million in outstanding receivables.

Within 18 months the bank hopes to have nearly 800,000 accounts nationwide, representing nearly $700 million in revolving debt.

"This is the first significant national program for us," said Mr. Gaines.

First Commerce issues one of two types of cards to military men and women.

People who do not qualify for the bank's MasterCard receive a private- label product called the Proprietary Club Card, which can be used only to purchase goods on the bases.

This card allows service people to build up a credit history and eventually apply for a standard MasterCard. The credit line as well as the criteria for approving credit are generally lower on this product, Mr. Gaines said.

The Air Force MasterCard can be used at all locations where the MasterCard brand is accepted. But credit cards issued by other financial institutions are not accepted on Air Force bases participating in the First Commerce program.

Both Air Force cards have dual functions as payment and membership cards. The cardholder's name as well the name of the club affiliation are embossed on the front of the card.

Mr. Gaines declined to reveal the terms of either card product, saying only that the interest rates are attractive.

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