NEW YORK - GE Capital Corp. on Wednesday unveiled a general-purpose Mastercard that carries a steep $25 annual fee but could return $1,000 a year in benefits to active users.

The long-anticipated product also carries a variable interest rate that currently stands at 18.4%, slightly higher than the national average.

The card, dubbed GE Rewards, is being promoted by the General Electric Co. subsidiary as a smart alternative for costconscious consumers - a tack also taken by Sears, Roebuck and Co.'s no-fee Discover Card.

Retail |Partners'

The new GE card, however, is being offered in conjunction with about two dozen retail and service "partners" - including Macy's, K mart, Hertz, and HbO/Cinemax - that have agreed to provide rebates to cardholders.

"The value equation on this card is second to none," David R. Nissen, chairman of GE Capital Consumer Financial Services said at a Manhattan press conference.

Cardholders will receive $10 of "rewards checks" for every $500 charged to their GE cards. The checks, issued by GE, can be used like cash at about 24 retailers program.

Each participating retailer also will provide $10 of savings certificates every quarter to cardholders. Consumers who sign up for new telephone or cable-TV services from Sprint, HBO, or Cinemax also will receive rebates. And they can get refunds of up $50 on GE appliances, depending on the model.

"It's a value-back card," Mr. Nissen said.

Some bankers said that GE was wisely marketing its card to a select audience of cardholders who pay off their balances each month but rack up a high volume of charges.

"A lot of competitors are moving to convenience users as the aspiration of most Americans is to pay their credit cards off in full," said Jerry D. Craft, head of the bank card program for Wachovia Corp.

Mr. Craft also downplayed the potential negative effects of GE's interest rates for those who do revolve.

The 18.4% interest rate is competitive as compared to high." he said. "It's not 19.8 or 21% either."

One of the Largest Lenders

GE Capital to be sure is no neophyte when it comes to credit card.

Its Monogram Bank unit, which is issuing the new MasterCard, is one of the nation's largest bank card lenders. It has more than $2.4 billion in card loans outstanding and 5.3 million card accounts, some of which are issued to customers of small banks around the country.

GE also runs private-label card programs for some 300 stores whose cards are held by about 65 million people. The private-label cards are coordinated through GE Capital's retailer financial services unit.

GE Capital, which has $80 billion of assets, would not offer many details of its marketing plans, but issued a warning to the card industry.

"We expect [GE Rewards] to be one of the largest credit card programs in America and we will support it to make that happen," Mr. Nissen said.

An initial direct-mail and tele-marketing campaign for the card will target some six million consumers, officials said. A GE Capital spokeswoman said the solicitations will go to new customers - not those that already carry a Monogram card or a GE-issued private-label store card.

The card, which carries the familiar script-written GE logo, will eventually be advertised on television and in print, Mr. Nissen said.

Insulation from Competitors

GE, however, is taking a risk in believing that consumers will value rebates more strongly than they abhor fees and relatively high rates on revolving balances. In fact, the company has taken steps to insulate some potential cardholders from competitors. It said it will offer a 14.9% rate to select cardholders based on credit criteria that it would not reveal.

Though GE will not book interest income from "smart" customers who go for the rebates but pay off their balances, its partnership program with the stores could provide a steady steam of interchange fees, said William Adcock. chairman of Synergistics Research Corp. in Atlanta.

Those are the payments that merchant banks make to card-issuing banks each time a credit card is used.

A Variety of Partners'

The retailers and service companies currenty participating in GE Rewards are: K mart, Toys R Us, Macy's, Kids R Us, Kinney Shoe, Foot Locker, Builders Square, Waldenbooks, Hyatt Hotels and Resorts, Northwest Airlines, Bullock's, Lady Foot Locker, Kids Foot Locker, Going to the Game, Hertz, HBO, Cinemax, Sprint, Athietic X-Press, Circuit City, Champs Sports, GE Appliances and authorized dealers, Officemax, and the Sports Authority.

Macy's is the only one in the group that currently offers a store card issued and processed by GE Capital.

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