Beneficial National Bank USA and BJ's Wholesale Club Inc. may be close to resolving a legal dispute that flared up last month over their cobranded credit card partnership.

The bank filed suit against BJ's on Sept. 19 after yearlong discussions hit a wall. It said it was losing money on a two-year-old MasterCard program that offers rebates to BJ's shoppers, because not enough cardholders were generating finance charges. Last month Beneficial began canceling more than 12,000 of these unprofitable accounts.

BJ's countersued Sept. 25 to block the cancellations. The discount warehouse retailer said it was doing so to protect its relationship with creditworthy customers who paid their bills on time.

But on Monday, Robert Wade, a spokesman for Beneficial, said that executives from both companies had met through the weekend and that a resolution might be imminent.

"I don't think they will terminate the program," Mr. Wade said. "We are trying to work this out."

A spokeswoman for BJ's would not return numerous telephone calls.

The bank, based in Wilmington, Del., had filed suit in New Castle County in the Superior Court of Delaware. The retailer, based in Natick, Mass., countersued in Massachusetts Superior Court.

Among the measures Beneficial is seeking is the right to assess an annual fee on some accounts. In its complaint, Beneficial said the cobranding program had been "hugely successful" for BJ's, but that Beneficial had sustained "substantial losses."

Beneficial said it plans to cancel 30,500 more cards by November as those accounts expire. There are about 300,000 BJ's MasterCards in circulation.

The retailer says it has four million members nationally. The MasterCard offer has proven popular: Beneficial argued that even with its slashes to the portfolio, enrollment in the program has exceeded the partners' expectations by 77%.

Cardholders receive BJ's Bucks, funded by Beneficial, equal to 2% of their purchases at BJ's stores and 1% of purchases elsewhere. Beneficial wants BJ's to help finance the rebate.

The BJ's dispute is the latest sign that cobranding's popularity is declining. This year a number of cobranded card programs have unraveled or been scaled back, as banks look more carefully at their profit margins.

But partners in sour cobranding deals seldom sue one another, said Anita Boomstein, an attorney with Hughes, Hubbard & Reed in New York. Other programs-like the Citibank/Ford Motor Co. credit card-have simply fizzled out.

Beneficial's move may signal the beginning of a trend, Ms. Boomstein said. "Profitability is on everyone's mind," she said.

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