alliances with General Motors and other cobranding partners, has brought US West into its fold. The Prospect Heights, Ill.-based financial services company announced last week that it bought US West Communications' credit card portfolio from U.S. Bancorp of Portland, Ore. U.S. Bancorp, which had issued the US West MasterCard and Visa cards since May 1993, said it wanted to focus instead on combining operations with its merger partner, West One Bancorp of Boise, Idaho. Terms of the credit card portfolio sale were not disclosed, but Robert K. Hammer, president of R.K. Hammer Investment Bankers, Newbury Park, Calif., estimated the 250,000 US West accounts were worth $45 million. "This is the continuance of a new trend where existing players divest pieces of their portfolio but remain in the (card) business," Mr. Hammer said. US West "felt their objectives were not being met, and we felt our objectives were not being met, so we decided to part ways," said Richard Comandich, senior vice president of U.S. Bancorp. U.S. Bancorp will be integrating 400,000 accounts from West One. According to The Nilson Report, U.S. Bancorp ranked 43d among U.S. credit card banks at midyear, with $841 million of loans on its books - after it had sold $230 million of outstandings and 480,000 American Automobile Association card accounts to Mellon Bank Corp. When the US West program was launched, the regional telephone company said it expected to have 500,000 accounts in two years and a million in five years. At 250,000 accounts, the portfolio is about where it was 18 months into the program, said Milton W. Fitch, managing director of US West Credit Card Services, Phoenix. "Strategically, we wanted to be more aggressive in acquisition of new accounts," he said, "but also in adding value to existing accounts." Even though U.S. Bancorp will be servicing the US West accounts through the first quarter, Household is orchestrating a fourth-quarter marketing push. Ten US West cardholders will win 200,000 "Marriott miles" - good for air fares and lodging at Marriott hotels. Mr. Fitch said US West has a small-business card program, with 2,500 cards, that Household took over at midyear. Both parties expect to market aggressively to small businesses. Joseph Saunders, president of Household's credit card unit in California, said the expansion of its relationship with US West fit in with its overall growth strategy. "What we do better than anyone is to pick strategic partners and develop a business with them and go about the chore of making it something significant," Mr. Saunders said. For example, he pointed to two regional Bell cobranded cards it issues, for Ameritech, with 800,000 accounts, and Pacific Bell, with 180,000. "We think the potential of this strategic alliance is much stronger than it is right now," Mr. Saunders said. "Our relationship is with US West," he added. "The purchasing of the portfolio was ancillary to the process ... This is the first time we entered into a significant strategic alliance and coincidentally bought a portfolio that went along with it." James L. Accomando, a credit card consultant in Connecticut, said issuers such as Household and Associates Corp., a Ford Motor Co. affiliate, are creating concentrations or specialties. In Household's case, it is with regional Bell operating companies, while Associates has a number of cobranding deals with petroleum companies. The combination credit card and telephone calling card comes with an 8.9% rate for six months. It then jumps to prime plus 9.9 points on standard cards or prime plus 8.9 points for gold. Cardholders pay no fees and earn 1% rebates on purchases and 2% on calling card calls. The fee structure is the same for the small-business card. US West serves more than 25 million customers in 14 western states. It also runs cable television businesses in the United Kingdom and in Atlanta. "My objective is to be able to serve all those entities with a cobranded product," which Household has shown it can do, Mr. Fitch said. "I needed an issuer that had the ability and the regulatory approval to issue and support all those companies."

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