Heritage Bank of Commerce, the same Silicon Valley community bank that first issued the Internet-only NextCard Visa, has agreed to distribute a new product, a secured credit card for teenagers and young adults.

The San Jose, Calif., bank, a subsidiary of $477 million-asset Heritage Commerce Corp., says it will work with Cobaltcard, a San Francisco start-up company, to issue a cobranded Visa card to 13 to 22-year-olds. The cards will be linked to deposit accounts into which young people or their parents can transfer funds.

The Cobaltcard will work slightly differently than a typical secured card. With secured cards, the collateral remains in the account. Cobaltcard cardholders will need to continually replenish their account as purchases are made and paid for.

"Cobaltcard is the buying card for the online generation," said Roberta Jacobs, president and chief executive officer of Cobaltcard. "Members can apply for the card themselves, and forget having to borrow their parents' credit card."

The card comes with a built-in coding mechanism that prohibits purchases from online retailers considered "inappropriate for young people," the company said.

Cardholders will not have to pay annual fees. Cobaltcard's revenue will come from interchange and from additional fees that 35 merchants have so far agreed to pay, in exchange for Web promotions from Cobaltcard and other benefits.

The joint marketing arrangement with Cobaltcard is like one Heritage used to have with NextCard Inc. Last year, NextCard acquired Textron National Bank and began issuing its own cards.

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