Bankers should brace for a fresh blast of competition from AT&T's giant credit card unit.

AT&T Universal Card Services Inc. recently hired a renowned market-share builder as chief ececutive - and he is expected to waste little time getting to work.

Rivals and consultants say that David K. Hunt, formerly of Signet Banking Corp., is likely to encourage more customers to transfer balances from other cards and to use the AT&T product more often.

That would address what may be the only real flaw in AT&T's card program: low account balances.

AT&T is the nation's second-largest issuer of Visa cards and MasterCards, with 16 million. But it ranks only sixth in dollar volume of outstandings - $6.6 billion, according to The Nilson Report, a newsletter.

The relatively small balances limit AT&T's ability to earn interest income, the lifeblood of most card companies.

Wanted: More Revolvers

The challenge Mr. Hunt faces is a huge customer base that is not producing optimal revenue, said Ronald N. Zebeck, chief executive of the General Motors Corp. MasterCard

"Somehow they need to get more revolvers into their portfolio," added Anne Morgan Moore, president of Synergistics Research Corp. in Atlanta.

Certainly, Mr. Hunt has the marketing savvy to made that happen. As Signet's card chief, he engineered an astonishing 188% growth in balances in the six months through March 31, to $1.8 billion. That easily made Signet one of the fastest-growing card companies in the country.

Earlier this month, Mr. Hunt was named to succed Paul G. Kahn as head of the AT&T business.

Dispute over Strategy

Mr. Kahn, who had led the program since its inception in 1990, resigned in February. He cited a disagreement over his proposals to diversify into other financial sevices.

An AT&T spokesman declined to predict what initiatives Mr. Hunt might launch in his new post. Mr. Hunt could not be reached for comment.

But his history at Virginia-based Signet suggest that Mr. Hunt is likely to focus first on creating a data base of the existing AT&T customers. That would lay the groundwork to segment the card base by income, age, travel habits, and other variables. The information could then be used in a targeted marketing program.

AT&T Universal is thought to be "very sophisticated in service but weaker in information-based strategies. I'm sure that's why David Hunt is going down there," said Jeffrey A. Solomson, president of Strategic Software Systems Inc.

Mr. Solomson worked for Mr. Hunt as a technical engineer at Signet before leaving earlier this year to form the consultancy.

Mr. Solomson said Signet incorporated historical behavior patterns of the cardholders into its data base, giving it a more powerful predictive tool than most banks.

Although Signet has refused to provide much detail on its marketing program, sources said a big part of the six-month 188% growth surge was due to the marketing of a balance transfer option to selected existing account holders.

An AT&T balance transfer incentive was a more modest success, producing growth of about 10% in a 12-month period.

Card Lures Thrifty Types

What's been holding back AT&T's balance growth?

Experts say a no-fee feature on the card has mainly attracted "convenience users." These economy-minded people use the card as an attractive alternative to cash - but they are averse to paying interest. As a result, they pay off their balances every month.

What's more, the experts say, consumers' ability to use the AT&T card for long-distance phone calls is not the attraction it once was. The features has been surpassed by competing credit card rebate programs, notably the automobile rebates offered by GM and Ford Motor Co.

K. Shelly Porges, chief executive of San Francisco-based Porges/Hudson Marketing Inc., suggested one tactic that could both boost balances and advance AT&T's goal of promoting its telephone business. AT&T, she said, could offer rebates for card use at its telephone shops.

Secured-Card Option

To attract customers more inclined to borrow than the upscale crowd that currently holds the AT&T Universal cards, the company could offer a secured card, said Ms. Moore of Synergistics.

At Signet, Mr. Hunt pursued Secured cards with gusto.

Finding the Right Program

These cards, which enable customers with poor credit or no credit to obtain a card by guaranteeing their line with a deposit, once were the province of fly-by-night hucksters. But Signet and some other companies have raised the cards to respectibility.

Ultimately, the tactics Mr. Hunt chooses will depend on what the predictive models tell him.

A Signet-style balance transfer program might not work on AT&T's cardholders, said Stephen M. Szekely, vice president credit card research, at Payment Systems Inc. in Tampa.

Many of these customers are by nature averse to building balances, and Mr. Szekely raised the possibility that the AT&T card may be the only one they have in their wallets.

A large number could have "no balances to consolidate, no matter how well executed the campaign is," he said.

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