Dean Witter, Discover & Co. wants to bag new cardholders from a cobranding agreement with Independent Grocers Alliance, the supermarket cooperative known as IGA.

The partnership is the second of its kind within a month for the Novus Card Services unit, which runs the Discover program. It follows a multiyear card and sponsorship agreement with Universal Studios.

The Riverwoods, Ill.-based issuer is becoming active in the cobranding game at a time when many banks are feeling the pinch of rising rebate costs.

In December, for example, Manufacturers and Traders Trust Co. of Buffalo dropped its Giant Food Visa program after only six months.

The new issuer, Chevy Chase Bank, took up the programs on terms said to be less profitable to the Maryland-based supermarket chain.

On April 1, NationsBank Corp. slapped a $20 annual fee on consumers who were taking advantage of its rebate-rich Blockbuster Visa card but were not revolving their credit balances.

"I think we are going to generate the enthusiasm, acceptance and usage of these cards in such a way that the financials will work," said William O'Hara, senior vice president of Novus Card Services. "At the same time, IGA and its customers will benefit."

IGA provides marketing, insurance, and technical support for 2,300 independently owned supermarkets.

"The supermarket is where everyone goes-it's a place that will drive activity and usage," said Dennis Shea, managing director of Auriemma Consulting Group, Westbury, N.Y.

Cardholders will receive 2 points for each dollar of IGA purchases and 1 point for each dollar on all other purchases. A $25 certificate, redeemable at IGA stores, will be issued when cardholders accumulate 2,500 points.

The card comes with an introductory interest rate of 8.9% for six months. Then it would jump to prime plus 9.9%; that now works out to 18.4%.

"Other issuers have offered more rebates, but they have had trouble making the numbers work," said Mr. Shea.

"The card might be offered in a few regional areas first, but the full rollout will be in mid-September," said Duane N. Martin, vice president, retail, at Chicago-based IGA.

More than half of IGA stores currently accept the Novus payment brand.

The Discover-Novus organization will try to introduce the brand into the remaining stores before the card is launched, said Mr. O'Hara.

"Discover has low enough discount rates that I wouldn't expect them to have much trouble selling to grocery stores," said Jeffrey Baxter, principal, S.J. Baxter & Associates, Forest Hill, Md. "The issue is whether or not IGA is as familiar a brand to the consumer as is a supermarket like Giant or Randalls."

Separately, Novus Card Services said it has added three celebrities to its Private Issue series of credit cards for 1997.

The artwork of the New York Knicks' Patrick Ewing and of two musicians, Tina Turner and the late Jerry Garcia, will be featured on the cards.

Cards featuring the artwork of Jane Seymour and Anthony Quinn will be retired after Wednesday.

In addition, next year the National Foundation for Advancement in the Arts will award Private Issue scholarships in visual arts to young artists. Each recipient will receive an all-expenses-paid trip to Miami for art workshops and a cash grant of $3,000.

Recipients may also be nominated to be White House Presidential Scholars.

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