One of the last Baby Bells at the ball has chosen a partner.

BellSouth Telecommunications Inc., Atlanta, announced a cobranded card to be issued by Prudential Bank, a subsidiary of the Prudential Insurance Company of America, also based in Atlanta.

This leaves only Bell Atlantic Corp. looking for a date.

The BellSouth Visa gives consumers 20% cash back for long-distance calls billed to the calling card, 2% back on the customer's residential bill when automatically charged to the Visa, and 1% back on general purchases and balance transfers.

The no-fee card has a 7.65% interest rate for six months, which jumps to prime plus 6% up to 9.9% based on the creditworthiness of the applicant.

Consumers will receive a rebate check once a year. A running tally will appear on their monthly Visa statements.

Direct mail solicitations will be sent to the 18 million qualifying BellSouth customers in its nine-state region beginning in October. An advertising campaign will follow.

Richard Tice, product manager for calling cards at BellSouth, said the regional telecom would pay for all the marketing expenses and Prudential would pick up the costs of the rebates.

BellSouth will not share interest income. "We went into this to offer our customers an attractive credit and calling card, not to get into the credit card business," said Mr. Tice.

Prudential, with $1.3 billion in outstandings and about one million accounts, won the bid because "we evaluated the proposals that the banks were willing to offer, and Prudential came out on top," Mr. Tice said.

Though the bank has some experience with cobranding, "this is our first major deal," said John Lounsbury, senior vice president of marketing at the financial services conglomerate.

"I think Prudential is an aggressive participant in the card business" and is looking to become a major player, said Don Berman, president of Cardholder Management Services, a Plainview, N.Y.-based company that manages credit card portfolios for banks and retailers. "I'm not surprised they won this; they've been the bridesmaid in a couple of other pretty big deals."

Another nonbank competitor, Household International, snared the credit card business of Ameritech Corp. and Pacific Bell.

As the premium cobranding partners get snapped up, the stakes to win their business get higher. Traditional banks have lost out in the past few weeks to the likes of Prudential and American Express Co., which consummated a cobranding deal with Delta Airlines earlier this month.

Are bankers dragging their feet to the altar? "There has to be some fiscal discipline in what you do," said Mr. Berman. "Some cobranded partners bring a new definition to the word partnership."

But he said the BellSouth deal was "pretty much the going rate for doing business with Bell operating companies."

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.