Stephen B. Galasso doesn't like to say no.

"My goal is to say 'yes' to every customer who comes into our branches," said the president and chief executive officer of BankAmerica Corp.'s credit card subsidiary, Bank of America NA.

The philosophy of putting cards in the hands of as many creditworthy people as possible has helped the unit increase its loan portfolio by more than 25%-to $10 billion-in five years. Stepping up its growth, the bank's balances are now growing 15% annually.

Mr. Galasso, 49, who has headed the Phoenix-based card operation since June 1995, described his approach as relationship-oriented. Since customers who use the bank's other services tend to be those who pay their credit card balances most faithfully, they are rewarded with extra customer service and other perks.

Mr. Galasso said he views each of Bank of America's 10 million customers as a ripe prospect who should be exposed to his product line whenever visiting one of the bank's 2,000 branches.

"We want to leverage our strength," Mr. Galasso said. "For us, strength lies in a distribution channel entirely different from mail.

"That doesn't mean we're not in direct mail-we very much are. But I would suspect that what I source from 'nonmail' is probably higher than virtually anyone else I compete with."

Bank of America accepts card applications by any available means, including mail, fax, phone, and the Internet. But trusty brick-and-mortar really gets the job done. Most branches offer a wide selection of the bank's 120 card products, ensuring that the right one is available for any given customer.

The bank has developed six credit scorecards for branches, using them since 1993 to reach what Mr. Galasso calls his "proprietary audience" of bank customers. California branches offer preapprovals; elsewhere, turnaround time can be as short as a day and a half.

"I will source more than 500,000 accounts through our branches this year," Mr. Galasso said. "I'd venture to say that is many hundred percent higher than the No. 2."

As further evidence of his operation's success, Mr. Galasso points to his campuslike complex near the Phoenix Sky Harbor airport: A fifth building was recently built to accommodate growth, and the employee roster has swelled to 1,900 from 1,200 in 1991.

The operation also includes smaller call centers in Pasadena, Calif., and Spokane, Wash.

New technology is steadily being installed at the 550,000-square-foot facility in Phoenix. Mr. Galasso is particularly proud of his photocard machines, which print customers' pictures on cards at their request, and "state-of-the-art embossing and imaging equipment."

In keeping with the directives of BankAmerica chief executive officer David Coulter, "our governing objective is increasing shareholder value," Mr. Galasso said. "We have made a large investment in information-based strategies to help us do that."

This focus on customer relationships and cross-selling began with Mr. Galasso's predecessor, Robert D. Sznewajs, who left in 1994 to become a senior executive of U.S. Bancorp in Portland, Ore.

Under Mr. Sznewajs, the credit card bank began to integrate its activities more closely with other divisions of the consumer bank. At Mr. Galasso's suggestion, Mr. Sznewajs also initiated placing customer photos and permanent signatures on cards and began, among other incentives, waiving fees on secured cards for people who had checking accounts with the bank.

Mr. Galasso continues to enhance the rewards available to Bank of America customers. "We have an even higher level of service for our relationship and branch-sourced customers," he said. In turn, those customers have paid back dividends in the form of lower delinquency rates.

Times were not always so flush. In 1992, when Mr. Galasso joined Bank of America as head of card marketing, net credit card losses after recoveries were at 6.16% of average loans, above the industry norm and almost double the level two years earlier.

Losses were worsening from quarter to quarter, and the bank that made history as the inventor of BankAmericard and forerunner of Visa seemed to be foundering.

"The balances fell by about $1 billion a few years back," recalled Robert K. Hammer, principal at R.K. Hammer Investment Bankers of Thousand Oaks, Calif. "It sounds like they have recouped that and gone on."

Mr. Hammer said "very good senior managers" are "part of the reason they have bounced back so nicely." Promoting Mr. Galasso from inside was a good move, he said, making him "responsible for the whole risk side, as opposed to just the growth side."

Mr. Hammer also said the bank had "done some innovative things to offset attrition," including the recent introduction of a bonus program for long- term account holders.

Mr. Galasso came to Bank of America after four years directing credit card marketing at Citibank. Typical of Citibankers, he previously worked at Lever Brothers Inc. and General Electric Co.

Moving from consumer goods to financial services was "very exciting," he said, because of the "incredible growth opportunities." When he made the switch in the late 1980s, "the card category was growing at almost 20% per year, and I don't know of many consumer categories that have that kind of growth.

"I think it would be very difficult for someone who had been in this business to go back to packaged goods," Mr. Galasso said.

Though the level of growth has slowed considerably, there is still room for creativity and expansion, Mr. Galasso said. He predicted the card market would grow "at least 6% to 8% this year and next year-and that's still pretty healthy compared to most of the consumer businesses that are out there."

Yet Mr. Galasso and his colleagues also voice caution about the storm clouds seen hovering over the credit industry. Thomas F. Theurkauf Jr., an analyst at Keefe Bruyette & Woods Inc. in New York, said Bank of America credit card executives show "a healthy respect for the credit cycle."

"They have held a rather subdued outlook for the business over the last year or so, and they've been right," he said. "The guidance they've given me has been accurate-systemwide losses have increased. Their view has been that something is rotten in Denmark."

Mr. Theurkauf said Bank of America has scaled back its marketing efforts and reexamined lending criteria. "It's been more than two years since they were active in the market at all in terms of solicitations," he said.

Mr. Theurkauf gave the bank high marks for noticing that card growth rates had become "unsustainable" and for making clear that it was not interested in portfolio acquisitions. But he looked askance at the idea of using credit cards to cross-sell.

"They're trying to figure out how to turn that card into a cross-sell and relationship vehicle, but there's not a lot of evidence of that working," Mr. Theurkauf said.

Mr. Galasso takes a different view, believing there is still ample room for new tie-ins between credit cards and other banking activities.

One example is cobranding. The bank has relationships with America West airlilnes, Sunoco, Alaska Airlines (which is allied with the Seafirst Bank affiliate in Seattle), and the recreational equipment retailer REI.

BofA announced an affinity card with the Phoneix Suns basketball team last week. Cardholders who amass 5,000 points get their name in lights on the main scoreboard at America West Arena.

In the future, Mr. Galasso said, "We would like to leverage the entire Bank of America in our cobranding opportunities."

"We are not interested today as much as we were three years ago in a deal that is just being the partner in the card," he said. "What we would like to do is to develop cobranded relationships that leverage multiple areas of Bank of America."

At least one new product is in the offing: a card tied to the 40th anniversary of the introduction of the BankAmericard in 1958. For promotional value, the bank is dusting off its memorabilia, including the first credit card television commercials from the the early 1960s. (See related article.)

"This will be a rewards card," said Mr. Galasso, offering few other details. "If the test market is successful-as I believe it will be-I think we can have quite a bash in 1998."

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