The township of South Orange, N.J., is officially on the credit card map.

Last April, the northern New Jersey town began looking for a bank partner to issue a credit card that would generate income for helping to revitalize downtown South Orange.

Valley National Bank of Wayne won the contract in September, and the first cards were in customers' hands by yearend.

The program has generated a lot of interest from other cash- starved municipalities looking for new revenue, New York City among them.

William R. Calabrese, South Orange's mayor and the creative force behind the town's MasterCard, said the office of New York Mayor Rudolph Giuliani has called a number of times inquiring about the program.

It has been rumored that the Big Apple is shopping for such a deal to raise money for its parks and recreation department.

Similar programs are beginning to pop up in other states. The Worcester, Mass., school board offers a credit card to beef up its schools' cash reserves for special programming.

The South Orange card is the only such MasterCard program linked to a municipality.

Visa, however, said several of its members have partnered with towns, including Lebanon Valley National Bank, which launched a program last November with the town of Lebanon, Pa.

The central Pennsylvania issuer shares half of the $15 annual fee and a portion of the revenues from card spending with the municipality.

So far, 800 people hold the South Orange card, out of what is considered a potential market of about 17,500.

The potential doubles if the population of Seton Hall University and people who commute to work in the town or worship there are counted.

South Orange's goal is to have 2,500 cardholders by the end of this year.

The 800 new customers have produced $4,000 for a fund that was set up to lend to local merchants who want to start a business or renovate a building.

One percent of the amount of each purchase made with the card goes into the town fund.

But the money is not allowed to sit for long before it is spent on the town, said Mr. Calabrese.

The mayor, who is a pharmacist in South Orange, said Valley National was chosen because its rebate offer was twice what some national issuers were willing to give.

For its part, Valley National is sending out direct mail solicitations and co-marketing the credit card.

The northern New Jersey bank said that, since the South Orange deal, it has signed a contract to offer a similar program with the Edison Education Foundation, which funds programs that improve the quality of education in Edison, N.J.

The interest rate on the South Orange card is 14.20%, and there is no annual fee.

The program has no benefits additional to competitive pricing and the fact that a portion of cardholders' spending benefits the town.

However, Mr. Calabrese has big plans for the card. He hopes to add frequent flier miles and discounts redeemable in local shops, among other things.

Fees generated from card spending could be as great as $100,000 annually, he estimated, which could increase property values by 10% to 20%.

"Houses in the town are going to increase in value as a direct result of the town looking better," he said.

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