Some credit card issuers are taking new steps to fight customer attrition.

Capital One Financial Corp. has introduced a prime-time television advertising campaign telling viewers they can stop rate-hopping, because their interest rates are so low. First Union Corp. recently sent a solicitation offering cash incentives to customers who keep the card for five or ten years.

Jumping from card to card has become a national pastime, as consumers move to take advantage of price wars in the credit card industry. Some people choose a new card every six months or so, after the introductory interest rate on the old card expires.

Though card issuers acknowledge they created the problem by offering competitive balance transfer rates, they now seem to be taking corrective steps.

Some issuers-including the First USA unit of Bank One Corp.-are now starting to charge modest fees on balances that are transferred to their cards. Providian Financial Corp. has eliminated teaser rates on balances that are transferred from other cards.

"The industry knows you could significantly reduce your pressure to acquire new accounts if you could stem the tide of people leaving," said Michael Auriemma, president of Auriemma Consulting Group Inc. of Westbury, N.Y.

But until recently, "what they have been focused on is lower and lower pricing."

A study by McKinsey & Co. said the average cost of acquiring a new credit card account through direct mail is about $100. With some introductory interest rates at 0% and some customers leaving after the introductory period, issuers can actually lose money by acquiring a new customer.

"Only 10% of the customers make up over 100% of (an issuer's) profits," said Lee A. Spirer, principal at Booz Allen & Hamilton Inc. in New York.

Though heavy competition keeps card companies churning out low-rate offers, some issuers are focusing more squarely on the other end of the equation. To hold onto fickle customers, they are developing retention models and data mining capabilities that let them predict with greater accuracy what individual customers need and want.

Industry experts think matching customers with the right product is the key to retaining them.

"The big new insight is getting down to individual features and pricing, depending on how they behave with the card," Mr. Spirer said. "But it takes significant modeling to be able to do that."

Mr. Spirer said pricing will become less important as issuers build up their data mining departments and find distinctive features that "anchor customers to their card."

First Union's new offer apparently targets people who feel comfortable with the prospect of long-term rewards. The company's solicitation offers 25% off total interest paid on the standard Visa or MasterCard card to people who keep it for five years, and 50% off after ten years. The card has a 12% annual percentage rate.

Analysts compared the offer to one made two years ago by Mellon Bank Corp., which promised to return all interest paid if the customer retained the card for 20 years. They said the Mellon product did not attract desirable customers.

"Mellon was a most spectacular belly flop," said James Shanahan, a partner in the Newark, Del. office of Business Dynamics Consulting Inc.

He predicted similar results for the First Union card. "People won't take actions today to get 25% back in interest payments sometime down the road," Mr. Shanahan said. "You're asking them to be a good boy for five years in order for something to happen about something they don't track anyway."

First Union said it was too early to track the results of the offer.

Capital One, which last year became one of the first credit card companies to come out with a low fixed rate of 9.9%, is now trying to use that rate as both an acquisition and retention strategy. Its television advertisements describe the rate as a reason to stick with the company, and to eliminate the bother of card-hopping.

The Falls Church, Va., company says its well-honed data mining techniques enable it to assign this rate only to customers for whom it would be appropriate.

First USA has begun charging customers who transfer balances to its cards 2% to 3% of the amount transferred, but no more than $50. "These charges relate to certain risk factors and handling costs," said George McCane, a spokesman for the Wilmington, Del., issuer. "It's an effort to engender loyalty."

Providian spokeswoman Laurie Cole said rates on transferred balances are now customized "for each person, depending on the information they give us."

"The idea is an extension of our primary goal of attracting people who are interested in establishing a long-term relationship," Ms. Cole said.

Some card companies say they are not developing new retention strategies. MBNA Corp., for example, said its affinity marketing program naturally retains customers, because customers who sign up for those kinds of cards are particularly loyal to the products.

The card becomes less of a fungible commodity because "we're appealing to something the customer has an interest in," said Brian Dalphon, senior executive vice president of MBNA, in Wilmington, Del.

Mr. Dalphon said 97% of MBNA's customers keep their cards. Those who do try to leave are referred to the retention department, where a credit analyst calls the customer and tries to work things out.

All retention strategies bear certain risks, experts warned. Issuers could lose money by giving the same offer to every customer, regardless of loyalty.

"You don't want to offer things to people who would have stayed anyway," Mr. Shanahan said.

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