American Express Co. and MCI Communications are teaming up to offer savings to their mutual customers.

The charge card company is essentially waiving its $55 annual fee for both old and new customers who have an American Express green card and also subscribe to one of MCI's long-distance telephone plans.

American Express is offering $55 credits for at least five years to people who meet the criteria.

For its part, MCI will credit long-distance calling card subscribers with $7.14 a month, which is the price of a 30-minute coast-to-coast call on a weekend night.

This is not the first time the two companies have commingled their marketing, and it also recalls other MCI forays in the card industry.

For 15 years MCI has accepted American Express cards for residential long distance billing, and customers may earn points redeemable for airline tickets in American Express' Membership Miles program.

New York-based American Express also launched a program in 1991, called ConnectPlus, which allows cardmembers to consolidate long-distance billings on an American Express account and earn a preferred rate from MCI.

The Washington-based telecommunications provider recently discontinued a program with Citibank, in which it offered 15 minutes of free long-distance calls a month, provided that the customer used a Citibank credit card at least once a month.

The program, which ran from November 1992 to March 1995, involved mailing customers a telephone coupon that they could send in with their monthly MCI payment.

MCI is also a partner in the General Motors/Household Bank MasterCard program; 10% of MCI billings can be applied towards a General Motors vehicle rebate.

"Our strategy has been to partner with financial institutions, not to compete against them," said Terry Macko, director of MCI's consumer segment marketing. "We look for partners that have strong relationships with their customers," he added.

American Express is a bit tentative about its latest alliance with MCI, calling it a test.

An American Express spokeswoman said the partnership is the latest supporting the company's strategy of "developing different value propositions to highly targeted customer segments."

"I see American Express as the lead partner in this alliance," said James L. Accomando, president of Accomando Consulting in Fairfield, Conn. "MCI looked at American Express' data base and concluded that it would be good for its file."

Mr. Accomando suspects that MCI will compensate American Express for its loss of the annual-fee amount. "This is a rich deal for consumers," he added.

One competitor was unimpressed.

AT&T Universal Card Services spokesman Bruce Reid said, "We recognized five years ago that customers didn't like annual fees, and our program doesn't have strings attached." Mr. Reid was alluding to the fact that American Express' $55 credit is valid only as long as customers remain loyal to MCI.

"People switch long-distance carriers all the time," said Mr. Reid.

American Express and MCI are not planning to make an media splash. They are sending out direct mail this week to prospective customers to be supplemented with telemarketing.

"Initially our goal is to get new customers," said a spokeswoman for American Express.

American Express customers currently using MCI are eligible for the $55 credit, but it is likely that they will have to ask for it.

The benefits will not be extended to the Optima line of revolving credit cards.

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