The credit card that General Motors Corp. plans to unveil today will pack more competitive punch than the one launched by General Electric Co. last week.

GM's MasterCard will be introduced with no annual fee and a below-market variable interest rate of 16.4%, according to card industry sources. It will be issued by a unit of Household International.

The terms are substantially cheaper than the $25 annual fee and 18.4% interest rate that General Electric attached to its "GE Rewards" MasterCard, introduced last week.

Challenges to Banks

But both cards offer substantial challenges to bank issuers because of price concessions offered to cardholders on products of their parent companies.

GM is expected to provide rebates on purchases of General Motors cars equal to 5% of a cardholder's annual charge volume. The rebate will be capped at $500.

A GM spokesman said the company would introduce the card today but would not elaborate. However, earlier this week GM aired several teaser ads on television, two of which read: "On Sept. 9, GM will turn plastic into steel" and "On Sept. 9, every credit card you carry will become last year's model."

Though bankers have long expected a GM card, they are not happy about the new incursions into what was once a bank-controlled industry.

Banking Response Urged

"As a banker, I don't like it," said A. Christian Fredrick, senior vice president at Fleet Financial Group. "We have to respond one way or another."

Fleet unveiled last week a promotional rate of 11.9% on transactions charged to its cards between Oct. 1 and Jan. 31, 1993. Mr. Fredrick said the program was designed long before the General Electric card was rolled out last week.

GE maintains that heavy users of its card can earn $1,000 a year in benefits through cash rebates and discounts from selected merchants.

But Mr. Fredrick and other industry experts see more of a threat from GM than from GE among interest-sensitive consumers.

They are prepared for a challenge similar to that of American Telephone and Telegraph Co.'s Universal Card, which was introduced with a no-fee-for-life pledge in 1990 to charter cardholders.

Doubts Voiced on GE Card

"Interest rates are where the consumer's head is at the moment," Mr. Fredrick said. "I think the GE product is very much off the target."

Added Robert McKinley, a card consultant in Fredrick, Md., "If the speculation on GM's pricing pans out, GM will be a much more attractive offer."

The GE program offers "rewards checks" of $10 for every $500 charged to the GE card. They can be used like cash at K mart, Macy's, Hertz, and some 21 other "GE partners."

The program, according to Mr. McKinley, "involves too much paperwork and too much coupon clipping to be attractive to consumers."

The GM card, by contrast, appears to be "no bother because rebates are automatically calculated," he said.

Household Bank, the issuer of the GM MasterCard, is already the nation's ninth-largest credit card bank, with 2.5 billion active accounts. The California-based bank is a unit of Household International, the consumer finance giant.

Household gained notoriety among bankers last year when it issued MasterCards for Ameritech, the Midwestern regional phone company.

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