Chase, Bell Atlantic Launching Cobranded Credit Cards

Chase Manhattan Corp. and Bell Atlantic have introduced cobranded Visa and MasterCard cards.

The program, which lets customers of the regional telephone company earn credits toward their monthly bills, is a revised version of the cobranded card Chase used to offer with Nynex.

After Nynex's merger last August with Bell Atlantic, Chase bought the $350 million Bell Atlantic Visa portfolio from First Omni Bank of Delaware, then a subsidiary of First Maryland Bancorp and since purchased by BankAmerica Corp.

Chase is issuing Bell Atlantic cards to the 70,000 people who held the Nynex card. In April cards will go out to the 500,000 people in the original Bell Atlantic portfolio.

The cards are available to consumers who live in Bell Atlantic's service area-Maine to Virginia-and Chase aims to have issued more than a million cards in the market within a year.

The product "offers consumers the combination of two of the most powerful brands on the East Coast," said Michael Urkowitz, executive vice president in charge of Chase's card unit.

Cardholders will have "all the benefits and privileges of worldwide recognition and acceptance, as well as no annual fee and cash value rewards."

Marianne Berry, Bell Atlantic's vice president for credit card and loyalty marketing, said customers have shown "a lot of interest" in the rewards card.

"Customers don't have to wait a long time to get their rewards," she said, "and there is no limit on the rewards they can get."

The card carries an introductory interest rate of 6.9% for nine months, which jumps to prime plus 7.4% (15.9%) for balances over $2,500 and prime plus 9.4% (17.9%) for balances up to $2,500.

Cardholders can earn 1% rebates on general purchases, 2% on Bell Atlantic residential phone services, and 3% on calling card calls. Cardholders are to get a rebate check for their Bell Atlantic bills each time they accumulate $20 in rewards.

Paul Kaiser, vice president of card member services at Chase, said the banking company has the same "geographic footprint" as Bell Atlantic and will draw on its "marketing skill" to expand the program. "As far as the customer goes, there has to be compelling value," he said.

Industry observers said that by aligning itself with such a large regional company, Chase has underlined its commitment to cobranding.

"There are only so many national deals available out there," said Frances M. Dale, president of Entandem, a consulting firm in Sterling, Va.

Ms. Dale called the Bell Atlantic rebate program generous but said the discounts' cost should pose no problem for either company.

"One of the advantages for telecommunications companies is that they have a fixed cost to have their lines out there," Ms. Dale said. "Any increase in use is a big benefit, and the cost does not increase at the same rate that the benefit does."

Chase also issues cards with Wal-Mart, British Airways, and Shell Oil.

"We are very selective in choosing our partners, and we make sure the economics of the value proposition works for us and the cardholder," said Mr. Kaiser of Chase.

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