For credit card issuers perplexed about how to survive in a rapidly changing market, Jerry D. Craft offers a solution: Outsource everything.

The Atlanta-based consultant wants his firm to be thought of an independent, one-stop card shop run by a team of veterans.

"If you're a financial institution, we're going to be your credit card department," said Mr. Craft, president and chief executive officer of Program Management Corp.

Best known for managing Wachovia Bank Card Services' rise from credit card obscurity to the industry's top 20, Mr. Craft has spent the last three years supporting client banks' card operations in various ways. He wants to take his outsource offering one step further by chartering a limited- purpose credit card bank.

To be known as Infibank, it would issue credit cards under the brand names of client institutions-which often would be midsize organizations that have not been able to match industry leaders' growth and economies of scale.

Infibank might also issue cards for nonbanks that could find it difficult to do so on their own.

Infibank's services would complement Program Management's menu. Not strictly a consultancy, Program Management works hand in hand with card issuers on anything from marketing to account processing to data mining.

Farming out an entire unit, especially one deemed critical to retail banking strategy, is "a pretty large step for a financial institution to make," Mr. Craft said.

"We pick up all the resources and the people they already have running the program, and what we are is an addition," he added. "But many institutions aren't comfortable going that far, and with Infibank we will have the ability to offer services in between."

Infibank gained approval in July from the Georgia Department of Banking and Finance and is waiting for the Federal Deposit Insurance Corp. to weigh in.

Mr. Craft said he has reached "an agreement in principle" with financiers to invest $21 million in Infibank. If all goes as planned, the bank will open in October and start issuing cards for clients by yearend.

Mr. Craft projects that Infibank would have a $52 million loan portfolio after one year, $200 million after three years.

Infibank's biggest selling point, Mr. Craft said, is the people who would run it. He has assembled a team with AT&T, Citibank, Wachovia, and Fair, Isaac & Co. in their backgrounds.

"We attempt to make the best of the expertise of all these people," said Mr. Craft, 50, who has been in the card business since 1969. Few banks on their own, he said, could afford to hire such expertise.

"There is no one person who knows all there is about this business," Mr. Craft said. "A lot of disciplines are careers unto themselves. Our goal is to have one of the best people in the industry on our staff in each discipline."

At Wachovia, Mr. Craft found a way to make the bank stand out from the crowd by emphasizing low interest rates for creditworthy people who habitually revolved their balances. Receivables doubled, to $4.1 billion, from 1992 to 1994.

Low-rate products probably would be part of the mix at Infibank.

"It's a matter of saying, 'Where am I going to provide the value, and how do I price accordingly?'" Mr. Craft said.

Infibank is needed, Mr. Craft said, because banks are too distracted by cosmic issues to pay attention to credit card details, particularly as margins tighten.

"They are deciding who they're going to merge with, who they're going to buy, how they are going to deal with offering insurance and corporate loans," he said. "They don't have the focus on credit cards. Our goal is to provide them with that focus."

Program Management has been doing just that for clients such as First American Corp. of Nashville and Webster Bank of Waterbury, Conn., delivering what Mr. Craft calls a "turnkey credit card program."

Even as Program Management breaks new ground with its outsourcing innovation, the company finds itself "in transition," Mr. Craft said. Aside from those two clients and some small consulting assignments, there are no other business relationships Mr. Craft feels free to disclose.

An alliance with First Data Corp., where Mr. Craft worked briefly after leaving Wachovia, has ended, freeing Program Management to work with banks that use any processor.

What was initially Program Management's biggest client, PNC Bank Corp., severed the relationship after its card and financial services venture with AAA-formerly the American Automobile Association-took off. Mr. Craft chalks that up as a victory, saying the program was so successful it did him out of a job.

Mr. Craft's is not the card consulting group seeking to set up a bank. First Annapolis of Linthicum, Md., is awaiting approval from the Office of the Comptroller of the Currency for its own limited-purpose credit card bank. Frederick A. White, president of First Annapolis, said he expects to announce the venture at the end of this month.

Even though the card business continues to attract new entrants, and Mr. Craft is optimistic about his own venture, he is bearish about overall industry prospects. He says losses will continue to rise but banks will want to retain their card programs, judging them to be core consumer offerings.

"Issuers today are making maybe half of what they made in 1994 on their card programs," Mr. Craft said. "They know what they're doing isn't working, and they've got to find a new solution."

William Farr 3d, a former colleague of Mr. Craft's at Wachovia (and at First National Bank of Atlanta before it was bought by Wachovia in 1985), would serve as president and chief executive officer of Infibank. Today he is a consultant to Program Management, which has paid him $110,000 to help set up the bank.

Mr. Farr said Infibank could acquire portfolios, issue cobranded cards, and revive the operations of mid-tier card banks that have struggled against giants.

"When the business gets difficult, everybody is looking for a doctor who can get them cured," said Mr. Farr, 58. "Essentially, this just gives Jerry an additional tool to serve a broader array of customers."

James A. Verbrugge, chairman of the University of Georgia banking department and a proposed director of Infibank, said the seed capital pledged to the venture indicates "it has met a market interest test."

"It provides an opportunity for banks to maintain a credit card operation while exporting some of the administrative parts of their activities," Mr. Verbrugge said. "This is not going to be a credit card bank that sends out 10 million credit card applications to everybody in the phone book."

By Mr. Craft's calculation, most creditworthy consumers have received 21 card mailers in the last three years. The upshot is that "if you're mailing today, you're No. 22, so you better have a distinction, you better have a value."

Mr. Craft boils down the secrets of success in the turbulent market to three elements: "Relationships with the customers, information about what's working and what's not, and a value proposition to the consumer."

"Three years ago, you probably could do O.K. with two out of the three," he said. "In today's environment, if you don't have all three all the time, you're not going to maximize where you're at."

Mr. Craft, a South Carolina native who knows one variety of peach from another, was a college student when first bitten by the credit card bug.

"I was riding to my home one day and saw a billboard for Master Charge," he said. "I had studied some about the checkless, cashless society, and I said, 'Gee, I'd like to get into something on the ground floor.'"

He joined First National Bank of South Carolina in the late 1960s "thinking we were going to move consumers to electronics and terminals real quickly." Through a series of acquisitions he ended up with North Carolina- based Wachovia, which adopted Atlanta as its card headquarters.

Mr. Craft was a firsthand witness to the evolution of automated teller machines-which, he said, were slow to take off in the same way that smart cards seem to be now-and he has seen the fortunes of card issuers rise and fall. He marvels that seven of the top 10 issuers weren't on the list a decade ago.

"The business has always been a bit entrepreneurial," he said. "A lot of bankers got into it who weren't used to 2% loss rates, and all of a sudden they went to 4% and then to 6% today."

The heady days at Wachovia taught Mr. Craft several lessons he espouses today: that consumers will pay extra for premium cards (such as those that accumulate frequent flier miles) and that pricing should not be on a one- size-fits-all basis.

"He really did a lot of things at Wachovia in terms of pricing and having a variety of products," said Anne Morgan Moore, president of Synergistics Research Corp. of Atlanta. "In the early days, most people had one card, one product."

Mr. Craft's successor at Wachovia, Beverly B. Wells, called his venture "really interesting" and characterized it as "helping to find ways for some of the smaller players to stay in the industry longer." But Ms. Wells questioned how long those smaller issuers would actually stay in the game.

Mr. Craft said the dynamics of the card market whet his intellectual appetite.

"This product is alive, it's not dead," he said. "Consumers are moving, and while your best efforts will be based on history, you have to stay flexible to deal with the movement."

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