GM Prepares To Launch Long-Awaited Credit Card

General Motors Corp. is on the verge of launching its widely expected general-purpose credit card, which would further crowd the field of nonbank card sponsors.

Industry sources said the automotive giant has signed a contract to market a MasterCard in conjunction with Banc One Corp., the Ohio-based company that is the nation's 14th-largest issuer of credit cards.

General Motors would not comment. But a number of indicators have surfaced in recent weeks.

Card Marketing Exec Hired

The company confirmed that it recently hired Ronald Zebeck, a marketing executive from Advanta Corp., to shepherd the card's launching. For five years, Mr. Zebeck had been vice president for marketing at Advanta, the large credit card issuer based in Horsham, Pa.

The advertising trace press also has been reporting intense competition among agencies to land the GM card account. Monday's edition of Adweek reported that McCann-Erickson had begun work on a $60 million campaign to introduce the card to the public.

Rumors about General Motors' credit-card aspirations buzzed through the industry almost two years ago, but a program has been slow to materialize. Meanwhile, such telecommunications giants as American Telephone and Telegraph Co. and Ameritech have put their logos on MasterCard and Visa products.

Banc One's Statement

In June, Ford Motor Corp. - GM's archrival - began offering free MasterCard and Visa cards to customers who had bought a Ford during the previous three years. Chrysler Corp. also has plans to sell credit card services to home appliance retailers through its finance subsidiary. Some industry observers see that as a forerunner to Chrysler's launching a general-purpose card.

A spokesman for Banc One said Monday that he could neither confirm nor deny that the company had agreed with General Motors. "They have to decide how they are going to do it," he said. "Until they make an announcement, nobody is in a position to say what they are doing."

A spokeswoman for McCann-Erickson in New York would not comment on the Adweek report. But observers said the agency's reported involvement - and the keen competition among other big agencies for the account - means a card is likely to be launched next year.

Sources said General Motors will enter the market through MasterCard International's co-branding program. The plan lets the card association's member banks issue cards in conjunction with a merchant or other service provider. Visa U.S.A., Master-Card's chief competitor, has stricter affinity rules to protect its bank members from outsiders.

Co-branded cards typically bear the logos of the issuing bank and its merchant partner, with the co-brander offering special incentives to promote use of the card.

Likely Card Incentives

Industry insiders said General Motors is likely to offer a free card with a low interest rate and rebates on purchases. Ford offers similar incentives.

In addition, the Adweek report said GM, mirroring many other card sponsors, is likely to offer cardholders discounts for long-distance phone calls.

For car companies, creation of a cardholder base offers ready outlets for new marketing programs. They can tap cardholder lists to advertise new products and sales and service programs. Collecting interest on outstanding receivables also diversifies the Detroit companies' revenue sources, analysts said.

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