AT&T Universal Card Services is marketing a credit card to small- business owners nationwide.

The AT&T Corp. unit has been testing the no-fee MasterCard for 18 months, netting 50,000 customers in select markets. American Express Co., which began offering no-fee cards nationally to small businesses nine months ago, has 500,000 cardholders.

"It is our intention to become a major player in the small-business credit card market," said Patrick Savage, vice president of marketing at AT&T Universal in Jacksonville, Fla.

While that market is still evolving, many lenders offer small-business owners cards with annual fees that have relatively high credit lines and low interest rates.

With $12.8 billion in credit card receivables, AT&T Universal Card Services is the sixth-largest consumer card lender in the country. Its industrial bank in Salt Lake City issues the card.

AT&T Universal Business Cards have variable annual percentage rates tied to the prime rate, ranging from 13.9% to 17.9%. The credit limit is $10,000 for a standard card and $25,000 for an executive card.

"It comes across as just another credit card," said Steve Alesio, president of American Express Small Business Services. "We are working on a much broader array of products for small-business owners."

American Express offers a gold card with a $20,000 credit limit and a platinum card with a $50,000 limit. Both American Express cards have introductory rates of 8.9%, which increase to 15.9% for the gold card and 15.4% for the platinum card.

Mr. Savage contended AT&T's cards will be more attractive to entrepreneurs because they can be used as calling cards, with a 10% discount on all telephone calls.

AT&T will allow customers to use the Internet to check on transactions made after their billing statement was printed. Business owners can also set individual credit limits on employees' cards.

Stanley Anderson, president of Anderson & Associates in Arvada, Colo., said he expects the AT&T card to appeal to entrepreneurs.

"For the small-business owner, AT&T has hit on three very important things: being able to control purchasing, travel expenses, and telephone bills with one card," Mr. Anderson said.

By comparison, Wells Fargo & Co., a bank leader in small-business lending, offers MasterCard credit lines of up to $75,000 at interest rates as low as 10.2%, with an annual fee of $150.

The San Francisco bank also offers a card with a $15,000 limit, a 14.5% interest rate, and a $55 annual fee that allows the borrower to earn frequent-flier miles on a variety of airlines.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.