Capital One Financial Corp. is adding a little muscle to its portfolio by issuing a cobranded Gold's Gym International Visa card this week.
While Capital One, one of the top 10 credit card issuers with $10.2 billion in receivables, offers a number of affinity cards, spokeswoman Diana Sun said the gym card is the bank's first foray into cobranding.
"I am surprised that Capital One has not jumped in to cobranding before," said credit card consultant Wendy B. Williamson of Entandem Inc., Reston, Va.
With the Gold's Gym Visa, cardholders may earn up to three months of free membership annually at any of the participating Gold's Gyms in the United States.
Capital One is offering an 8.9% introductory interest rate good until October, when the regular rate of prime plus 8.15% goes into effect. There is no annual fee.
Gold's Gym cardholders earn one point for every dollar they spend using the credit card, or two points for spending at Gold's Gym and a 500-point bonus for their first purchase.
The cost of a Gold's Gym membership varies, depending on the market in which it is located, but Gold's Gym spokesman Marc Missiorcek, said average annual dues are about $350 - though some gyms in major metropolitan areas might charge as much as $1,000. One free month requires 1,500 points, and free months are tacked onto the membership when it expires.
Chicago-based Bally Total Fitness, formerly Bally's Health and Tennis Corp., will launch a similar card with a bank within four to six months, said Lee Hillman, executive vice president. The company is also testing another health-club card with a second bank, which Mr. Hillman declined to identify.
In 1994, Providian Bancorp tested a credit card with Bally's Health and Tennis Corp., but Mr. Hillman said that since April 1995 no new cards have been issued under that program.
The Gold's Gym card will first be offered to the 1.5 to 2 million members of Gold's Gym, which has 384 locations in the United States. In the second half of this year, Mr. Missiorcek expects marketing efforts to include prospective members.
Capital One and Gold's Gym are also negotiating with national retailers to offer discounts and double points. For example, Avis, the rental car chain, will offer cardholders discounts on its cars, and customers will also earn double points that can be redeemed for the gym membership. The partners hope to sign hotels, restaurants, and airlines as well.
