Taking direct aim at American Express, First Union Corp. has launched an ambitious push to offer more credit cards to small businesses.

Since March, the Charlotte, N.C.-based banking company has bombarded one million businesses in 20 states in the East and the Midwest with credit card solicitations. And company officials said this is just a prelude to nationwide offers and more aggressive marketing.

Industry observers believe First Union's effort is one of the most ambitious moves to date by a bank seeking to target small business credit card customers. Minneapolis-based First Bank System Inc. is believed to be the largest bank issuer of corporate credit cards to large and small businesses.

"This is consistent with where we want to be in small business: a market leader," said J. Kevin Toomb, vice president of small-business banking for $131.9 billion-asset First Union.

First Union's plan comes at a time when many banks are developing new ways to provide financial services to small businesses. And observers expect First Union's effort in credit cards will inspire other banks to make similar moves.

"In a year or two years there's going to be an awful lot of companies pushing small-business cards," said Charles Wendel, president of New York- based Financial Institutions Consulting."Any company that is either strong in credit cards or small business is going to want to have a credit card out there."

First Union has offered a small-business card for four years without aggressive marketing behind it, said David Benjamin, the bank's vice president of marketing and commercial card manager. He said he hoped to double the card's current penetration to 84,000 customers and $40 million in outstanding credit.

First Union's direct-mail solicitations take shots at the largest small- business card issuer, American Express, which has 1.9 million small- business accounts. The letters pointed to the lower fees and wider acceptance of First Union's Visa product.

"(American Express) is the biggest one, so they're the one we're going after," Mr. Gable said.

American Express officials could not be reached before presstime.

Within 18 months, First Union should be making preapproved credit card offers, and it plans to offer business credit cards nationwide, Mr. Benjamin said.

The push was masterminded by Mr. Benjamin, who joined First Union about a year ago from First Bank System where he ran the small-business card program. First Bank card officials could not be reached for comment, and a spokesman for the bank did not know what percentage of their cards business is marketed to small companies.

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