Bell Atlantic Unveils Its Entry in the Cobranded Visa Derby

Bell Atlantic Corp. announced details Tuesday of its Visa credit card, making it the last of the Baby Bell companies to join the cobranding fray.

The card, issued by First Omni Bank of Millsboro, Del., has no annual fee and a 7.9% introductory interest rate for six months. After that, the rate is prime plus 8.9%. Like the other regional Bell products, it comes with a calling card feature.

It also pays a 1% rebate on ordinary purchases that can be applied toward Bell Atlantic bills. Cardholders will also get 2% back on the Bell Atlantic portion of their residential phone bills and 3% on calling card usage.

Balance transfers of up to $10,000 will be allowed, Bell Atlantic said, and they carry a 1% rebate. The company also promises a $5 sign-up bonus and another $5 on each anniversary of the account.

Bell Atlantic estimated the typical consumer would see $40 to $60 a year in savings.

"We're terribly excited by this," said Charles A. Schmidt, senior vice president and general manager of First Omni, a unit of First Maryland Bancorp, Baltimore, which currently has 800,000 accounts. "This will really put us on the map."

Bruce Gordon, president of Bell Atlantic's consumer and small-business group, characterized it as a "life as usual" card. "Most customers use their phone day in and day out, and when they use this card they will be rewarded for it."

Consultant James L. Accomando questioned whether Bell Atlantic's Visa can attract a wide audience. "This is more of a rifle approach than shotgun," said Mr. Accomando, president of Accomando Consulting Inc., Fairfield, Conn., because it appeals mainly to those who either use or want to use Virginia-based Bell Atlantic.

Mr. Accomando said the cobranded card would have difficulty competing with others - including those of General Motors, Ford, and Toys 'R Us - that have broader enhancements, such as travel bonuses.

Mr. Accomando noted, though, that if Bell Atlantic has plans for "a differentiator," it might announce it later on, when it would get more attention.

Customers who obtain the card but do not use it over the course of a year will be assessed a $20 inactivity fee. "Is this standard? No," said Mr. Accomando. "Is this the trend? Yes."

The Bell Atlantic/First Omni announcement comes just six weeks after BellSouth Telecommunications Inc. and Prudential Bank, both of Atlanta, introduced a cobranded Visa.

They were preceded in April by Nynex Corp., which serves the Northeast, and Chase Manhattan Bank of New York; and in March by SBC Communications Inc., formerly Southwestern Bell, and Mercantile Card Services Inc.

Household International issues the Pacific Bell Visa and the Ameritech Complete Card, while U.S. Bancorp issues a cobranded card for U.S. West.

Telephone companies have been a major force in the credit card business since the 1990 launch of the AT&T Universal card, which has attracted more than 22 million cardholders.

Mr. Accomando said all the Baby Bell programs will succeed "because they divide up the territory. It's not like they're competing with each other."

AT&T, MCI, and Sprint, by contrast, compete on a national scale, which spills over into cobranded cards and joint marketing arrangements with card issuers.

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