Market shares among the top 20 credit card issuers have shifted this year in favor of issuers of cobranded and low-interest-rate cards, a securities analyst concluded in a report for Sanford C. Bernstein & Co.

At the same time, mass market issuers - including money-center banks - lost ground.

The analysis of industry data showed that the declines in market share at the five largest losers roughly equaled the increases of the five largest gainers.

Household Bank and AT&T Universal Card Services showed the biggest gains in outstandings - $3 billion and $2 billion, respectively - through, the first half of 1993, said Moshe A. Orenbuch, who covers the credit card industry for Sanford C. Bernstein.

60% Growth Rates

Low-rate and cobranded strategies yielded growth rates of about 60%, Mr. Orenbuch said, which is six times the industry average and three times the level of any other segment.

In the 12 months through June 30, low-rate issuers among the industry's top 20 went from a 7% to 10% market share, cobranded issuers from 10% to 13%.

By contrast, the mass market category declined to 47% from 53%, and the mass market/regional group to 16% from 17%. Specialty issuers - MBNA America Bank, Bank of New York, and First Deposit National Bank - grew to 14% from 13%.

Different Customers

The low-rate and cobranded groups have been able to coexist without cannibalizing each other because they attract different customers, Mr. Orenbuch said. Cobranded cards attract people trying to take advantage of card-usage incentives, in contrast to "hard-core revolvers" of loan balances.

This is why money-center banks, such as Citicorp with its Ford Motor Co. card, and Chemical Bank with Shell Oil, have turned to cobranding, Mr. Orenbuch said - to build and retain their portfolios.

But money-center banks have been among the mass marketers to lose share this year, Mr. Orenbuch noted. The losers included Chemical Bank ($361 million), Chase Manhattan Bank ($1 billion), and Citibank ($4.5 billion).

While many of the money-centers have used so-called teaser offers as a way to attract new accounts, Mr. Orenbuch said, those rates climb to the 15% to 17% range - well above the most competitive rates.

Issuers that offer teasers that evolve into fully indexed rates of 11 % to 14%, on the other hand, have had considerable success, he said.

Mr. Orenbuch also found that three aggressive low-rate, indexing banks - Advanta Corp.'s Colonial National Bank USA, First USA Bank, and Signet Bank of Virginia - have increased their combined market share from 3.56% in December 1991 to 5.58% in June 1993, and he projects 6.68% at yearend.

He predicted that low-rate card issuers will gain a significant number of new accounts in 1994, which will result in increased earnings in 1995-96.Winning Strategies Receivables growth for 12months through June, in billions Household Bank $3.05AT&T Universal 2.00Signet Bank 1.61First USA Bank 1.17First Chicago 0.81MBNA America 0.71Wachovia Bank 0.68Bank of New York 0.64Fleet Bank 0.38Colonial National 0.36 Sources: Sanford C. Bernstein,. The Nilson Report, company data

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