NationsBank Corp. started charging a $20 annual fee April 1 to about 6% of its Blockbuster Visa card portfolio, said a bank spokeswoman.

Letters were sent out last August to consumers, advising them of the change. Cardholders who pay their bills in full each month are hit with the new fee.

The Charlotte, N.C.-based bank rolled out the no-fee card two years ago with an extensive advertising campaign. And industry observers hailed it as a predecessor to other entertainment cobranded deals.

At the time, consumers received 5% rebates on all Visa purchases at Blockbuster Video, Blockbuster Music, Discovery Zone Funcenters, and Paramount park locations. The rebates are issued as "Blockbuster bucks" redeemable for video rentals.

The fee was levied to offset the costs of those rebates, the NationsBank spokeswoman said.

For fee-paying customers, the current interest rate-prime plus 9.9%, which now works out to 18.4%-will be reduced to prime plus 5.9% for any month they carry over a balance.

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