Fisher-Price Inc., the leading manufacturer of toys for infants and preschoolers, has joined with M&T Bank to issue the first cobranded card offering U.S. Savings Bonds as incentives.

The Fisher-Price Visa has no annual fee and an 8.9% interest rate through Dec. 31, after which the rate shifts to prime plus 7.9%. It offers a 25-day interest free grace period.

One percent of every purchase made goes toward the bonds, with an additional 5% awarded for Fisher-Price buys. For example, $100 of non- Fisher-Price purchases would earn the cardholder one point, while the same amount on store items would yield six points.

A $50 bond is awarded for every 25 points earned by the cardholder, M&T said. Balance transfers of $1,000 or more will also earn that amount.

Fisher-Price, based in Buffalo, is promoting the program as a means for parents and grandparents to save for their children's future, although savings bonds can be redeemed for any purpose.

"The standard run of the mill card you'd expect would be one that simply gives rebates on Fisher-Price toys," said Stu Feldstein, president of SMR Research Group in Budd Lake, N.J. "Instead, they're offering something more attractive, since most savings bonds are purchased by parents with young kids. People like to get them anyway - they're better than a store discount."

Toys R Us, the world's largest toy retailer, introduced a cobranded Bank of New York Visa last September. Cardholders get a $3 rebate at Toys R Us or Kids R Us locations, 1% back on general purchases, plus a gift certificate of $10 upon approval.

While the Fisher-Price Visa is the first cobranded card to offer savings bonds, the concept is not new in the bank card industry. Advanta Corp.'s Edvance card, introduced in May 1994, similarly rewards spending with bonds.

The Fisher-Price Visa will be initially offered through pre-approved direct mail and telemarketing. Cardholders will receive special offers on store products and a twice-yearly shopping guide.

M&T Bank, Buffalo, is a subsidiary of First Empire State Corp., a holding company with $12 billion in assets. The bank has 320,000 cards outstanding.

M&T's other cobranding programs include Tops and Price Chopper - two northeastern supermarket chains - and Frontier Communications, a northeastern phone company.

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