European American Bank is quietly testing the EAB Opportunity MasterCard, aimed at customers who keep balances on their credit cards each month.

The no-fee card, offered to some of the bank's 300,000 cardholders, features a one-time 10% cash rebate on the average balance at the end of 18 months.

"The card is specifically for revolvers," said Virginia R. Sigal, group vice president, product and marketing development, at the Uniondale, N.Y., bank.

The subsidiary of ABN Amro Holding of the Netherlands also markets a cobranded card for TWA frequent fliers and an affinity card with the Long Island Philharmonic Orchestra.

The Opportunity card, with a variable interest rate of 16.9%, allows no grace period for purchases or cash advances. Interest accrues from the time a transaction is posted.

Ms. Sigal said the card would not appeal to consumers who insist on grace periods.

EAB would not release marketing details, but Ms. Sigal acknowledged that the bank is looking at "different value propositions" to be offered after 18 months.

"I'm concerned that the structure of the card encourages consumers to increase their debt in a time of high delinquencies," said Janice Shields, consumer research director at the Public Interest Research Group in Washington.

"EAB is trying to steal consumers from other cards in this saturated credit market by offering a one-time-only 10% cash offer," she added. "Consumers will maintain a balance and incur interest charges in order to redeem the 10% cash, rather than be a convenience user."

Robert B. McKinley, president of RAM Research Group in Frederick, Md., called EAB's marketing effort "very smart, because most issuers don't want nonrevolvers.

"Other issuers encourage cardholders to carry balances with different incentive programs, but this is the first time that I have heard of an issuer deliberately excluding convenience users," he said.

Mellon Bank Corp.'s Cornerstone MasterCard, introduced in 1994, offered a graduated rebate on interest payments, climbing to 100% after 20 years.

Chase Manhattan Corp.'s Cashbuilder Visa offers cash rewards based on spending and finance charges.

"This industry has educated consumers," said K. Shelly Porges, chief executive of Porges/Hudson Marketing Inc. in San Francisco. "As a result, consumers have become very savvy in their approach to the card market."

Mr. McKinley suggested that the EAB card continues the industry trend toward rewarding people who revolve balances.

"GE did it," he said, by charging convenience users a $25 annual fee. "GM is closing the door on people who max out their card programs" by cutting in half what gold card customers can earn in a year. "The profits are with the revolvers."

Industry watchers also wonder how long EAB can keep its program going.

"EAB doesn't want to commit to a long-term thing," said Mr. McKinley, "so 18 months is a good time frame to assess the success of the product.

"They will have to think of something to stem attrition at the end of that period, whether it's continuing the incentive program, introducing a low, long-term rate, or something else."

"I think only the unsophisticated consumers will see a benefit in this card," said Ms. Porges. "Most consumers will think, 'Is it worth carrying a balance for 18 months and then switch the balance to another card?'"

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