Beneficial National Bank USA, the nation's third-largest private-label credit card issuer, has launched its first cobranding program.
The Wilmington, Del.-based company has joined with BJ's Wholesale Club, a chain of 65 discount stores in 12 eastern states from Maine to Florida, in introducing the BJ's MasterCard.
Currently the card, which features fireworks and the BJ's logo, is being piloted in three New York locations - Albany, Saratoga, and Wappingers Falls. It should be available at all BJ's locations by mid-October.
"This is the first cobranding partnership we know of in the wholesale club area," said Ross N. Longfield, Beneficial's president and chief executive. He added that it "demonstrates our commitment to providing unique and customized products."
In a promotion comparable to private-label card offers, the BJ's MasterCard will charge no interest through Jan. 31. After that, customers will be charged the prime rate plus 10.9%.
Card incentives include a rebate of 4% on the BJ's MasterCard purchases through Jan. 31, 1996, and 2% thereafter. Customers will earn a 1% rebate on MasterCard purchases at other locations.
"It is a more generous rebate than normal," noted Mr. Longfield, who likened such a tactic to the favorable first-year rates offered by issuers hoping to attract customers. "It gives people an incentive to use the card."
Mr. Longfield would not say whether Beneficial National, a regional player, will eventually attempt to reach a national audience. "Keep in mind that these kinds of partnerships are driven by where the partner is," he said. "If the partner is national, we'll be national."
He also left the door open in terms of pursuing additional cobranding partnerships with other wholesalers and retailers.
Beneficial National has private-label relationships with Pergament household discount stores and Best Buy electronics stores.
"We will do so opportunistically," Mr. Longfield said. "It makes sense in certain industries, but not all. In some instances a private-label card might be more appropriate."
With $1.7 billion of receivables, Beneficial National is the third- largest private-label issuer in the country five years into the business.
The once-crowded wholesale club industry has diminished in recent years. BJ's is the smallest of the three that remain, according to Robert Kahn, a management consultant and publisher of Retailing Today. The other two are Sam's Club and Price Costco Inc.
"For a while, BJ's has had the Northeast more or less to themselves," Mr. Kahn said. "But now that Sam's is moving into these areas, the number of days BJ's had if they didn't make this move were probably limited."
Michael O'Brien, a MasterCard spokesman, said the BJ's card "opens up a whole new category for us."
BJ's said it was a desire to expand customer payment options that led it to issue a card and at the same time accept credit cards.
"For some time now, our customers have told us they would like to pay with a major credit card like a MasterCard," said Julie Somers, a BJ's spokeswoman. Previously, customers were limited to choosing among Discover, cash, check, or BJ's private-label card.
BJ's merchandise ranges from steaks to tires to personal computers. The company had sales of about $2.3 billion in 1994.
