M&T Bank of Buffalo has launched its second cobranded credit card in four months, this one offering rebates on long distance telephone service.

The Frontier Visa will be issued with Frontier Communications International, formerly the Rochester Telephone Co., one of the oldest independent telephone companies in the country.

Frontier has grown, through recent acquisitions, to delivering local service to 33 markets. After the pending purchase of ALC, owner of Alltel Corp., it will be the fifth-largest long distance provider in the country, behind LDDS Metromedia Communications, Sprint, MCI, and AT&T.

A Frontier spokeswoman said the card will provide a way to generate more awareness of the company. "We made a name change," she said; "we want to make sure people know who we are."

M&T, in an effort to increase its card portfolio, now at 150,000 accounts and $180 million outstanding, has "committed ourselves to the cobranding business," said Alan M. Ellison, vice president, consumer credit card product management.

Last April, the First Empire State Corp. subsidiary announced a cobranding deal with Tops Friendly Markets that rewarded cardholders with discounts on groceries.

At that time the bank owned 130,000 accounts and $150 million in outstandings.

"We're finding our credit card customers are very interested in value- added type benefits and this is a very good way to give them that, versus competing on rate," said Mr. Ellison.

Robert B. McKinley, president of RAM Research Corp., Frederick, Md., called Frontier an "up-and-coming company with explosive growth." He said its rates are competitive and said the partnership is "a shot in the arm" for M&T.

Frontier Visa cardholders will receive 1% cash back on all general purchases, and 5% cash back on Frontier residential and calling card long- distance service, up to $500 a year. Cardholders will be paid by check once a year in February. In addition, M&T is offering a 1% rebate on all initial balance transfers from non-M&T accounts.

The card has an introductory fixed rate of 8.9% through March 31, 1996. Afterwards, the rate will jump to prime plus 8.9% for Visa Classic and prime plus 7.9% for Visa Gold.

Although the discount applies only to long distance, the Frontier Visa's rebate scheme is similar to that of regional Bell companies.

Southwestern Bell, in comparison, offers 5% back for local and long- distance phone service, as well as 1% back for general purchases. A teaser rate of 7.9% kicked off the promotion, with rates rising to 6% over prime thereafter.

But Southwestern Bell customers must charge their expenses to the card to get the rebate. Frontier customers can pay their long-distance bill by check and still receive 5% cash back.

The card will initially be marketed to 500,000 consumers in New York, Pennsylvania, Connecticut, Ohio, and New Jersey through direct mail. Take- one applications will be available in M&T branches and Frontier retail locations. The partners plan to market the card nationally in the future.

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