American Express Co. does not seem to have thwarted Chase Manhattan Corp.'s plan to conduct a 19.5 million-piece direct mail campaign for a platinum credit card.

American Express and Chase said they reached "an amicable resolution" to the deceptive-advertising claim that Amex filed against the New York bank on Dec. 22 in U.S. District Court for the Southern District of New York.

The mailing is expected to trumpet Chase's quality ratings from the market research firm J.D. Power and Associates, which the lawsuit said lacked validity because American Express' Platinum card was not included in the Power study.

Besides seeking to halt the promotion, American Express asked for unspecified punitive damages from a two-week print advertising campaign in early December.

The companies would not reveal details of their settlement, which took place just as the mailing was being prepared.

American Express voiced complaints after the newspaper ads mentioned the recent J.D. Power recognition of Chase's platinum credit card and its Wal- Mart MasterCard.

The quality rating program listed Chase No. 1 in customer satisfaction for 1998 in both the platinum and basic/gold card categories.

"The superiority claims contained in Chase's advertisements are literally false," the suit charged. According to American Express, the ads incorrectly use the awards to "claim superiority over all credit cards."

Andrew March, director of financial services for J.D. Power in Westport, Conn., said the study did not include American Express cards because they are charge cards, requiring that balances are paid in full, as opposed to revolving credit cards.

To have American Express in the study "would be comparing apples to oranges," Mr. March said.

The American Express Optima card, which is a credit card, was included, and it came in second to Chase's Wal-Mart MasterCard in the basic/gold category.

The American Express Platinum Optima card was not included in the platinum category because not enough of these cards are in circulation to meet the study's requirements, Mr. March said.

Industry experts found the suit to be of little importance and likely to go unnoticed by consumers.

"Litigation takes a lot of management attention," said James Shanahan of Business Dynamics Consulting's Newark, Del., office. "They would be better served by focusing on the needs of the marketplace."

Litigation has become commonplace in the credit card industry.

In late November, Morgan Stanley Dean Witter's Discover unit filed a suit against American Express, alleging that its introduction of a "Cash Back Card" constituted a trademark violation.

Riverwoods, Ill.-based Discover said American Express violated its rights to the term "cash back bonus." The suit is still pending in federal court.

Gail Wasserman, spokeswoman for American Express, said litigation is increasing because a saturated market has left issuers competing for the same niche groups of customers.

"The distinction among issuers is more critical, and that is why you see a company like American Express vigorously defending its brand," she said.

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TAMPA-Platinum bank card ownership has increased at the expense of gold cards, according to a recent study by PSI Global.

This year, 22% of U.S. households said they have a platinum card, up from 7% a year ago, according to the research firm. Gold card ownership declined to 41%, from 50%.

The survey of 2,400 households indicated that the number of households that hold general purpose accounts has remained unchanged from a year ago- the survey extrapolated the number to be 81 million households-but that the number of accounts per household has increased to three.

According to PSI's calculations, the number of active general purpose accounts has increased from 220 million in 1996 to 244 million in 1998, a 14% rise.

Average balances were $2,438 in the 1997 survey and $2,383 this year.

"Consumers are simply increasing the number of cards in their wallets," said Lisa Stein, director of research at PSI Global.

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