AS RONALD N. ZEBECK sees it, one of the best perks of his job at General Motors Corp. is the opportunity "to drive cars that haven't been built yet."
That occasional recreation on GM's test track is payment in kind, since Mr. Zebeck created a credit card that has performed like no other in so short a time.
One might say the 38-year-old managing director of GM's huge MasterCard program was a "test driver" long before he joined General Motors in 1991.
He was previously in charge of marketing at Colonial National Bank, the Advanta Corp. subsidiary, where he was involved in a pioneering gold card with no annual fee. Before that, he worked in Citicorp's Choice unit, one of the first to use rebates as an incentive for credit card use.
Mr. Zebeck said the key to success in credit card marketing is to "break through the clutter." Advanta and Choice developed innovations that quickly spread into the industry mainstream.
With General Motors, Mr. Zebeck may have opened a new era in credit card competition and in the phenomenon of cobranding. GM is the marquee name; Household Bank is the card issuer; and MasterCard is the brand.
When he was approached in 1991 about a proposed card that would bridge car sales and financial services, Mr. Zebeck sensed "a very powerful opportunity." When the card was launched in September 1992, it did far more than break the clutter.
Cardholders have run up more than $3.3 billion in credit balances on their seven million GM MasterCards, and cashed in rebates on more than 45,000 cars and trucks.
The benefit-laden, no-annual-fee card helped make "value-added" an industry buzzword.
And Mr. Zebeck has attained a measure of personal fame: His name is on the card pictured on billboards and in other advertising.
Mr. Zebeck recalled that, when he joined the company, GM was getting ready to offer a card that did little to distinguish itself from the competition. After talking to a number of conventional issuers, the auto maker was contemplating an annual fee, an interest rate of 19.5%, and rebate credits equal to 1% of purchases.
The pricing would hardly have been distinguishable from many bank cards, and the rebate equaled the maximum on the Discover card, then a product of Sears, Roebuck and Co.
"We had to find a bank partner willing to provide a good consumer value," Mr. Zebeck said. "Not everybody could see the vision."
In early 1992, he hooked up with Household Bank, with which Mr. Zebeck had become familiar when Advanta Corp. sold the Household International subsidiary a portfolio of card loans.
Household was in a growth mode and eager to give customers more reasons to use its cards. Mr. Zebeck quickly hammered out the joint marketing and revenue-sharing agreement with Household Bank president Joseph Saunders, who aced out several other interested bankers.
The product that emerged was a radical departure from what was originally contemplated. The interest rate was 16.4%; the rebate, 5%; and no annual fee was imposed.
Within a month, GM opened one million accounts, smashing the record of American Telephone and Telegraph Co.'s Universal card, which took 78 days to reach that milestone after its introduction in 1990. It took Universal 30 months to reach 10 million, on its way to the current total of 11.9 million.
By the time Citicorp and Ford Motor Co. answered with a cobranded Visa card last February, GM had unveiled a no-fee gold version of its card that kept the juggernaut in motion. The program has also been a big success for Household, enabling it to move rapidly up the rankings of bank card issuers. Its receivables of $7.3 billion -- including the $3.3 billion on GM cards -- equal those of AT&T Universal, which ranks seventh among bank cards
Because Household's financial arragements with GM are undisclosed, experts disagree as to how profitable the card has been to the bank.
Richard S. Goleniewski, analyst at Goldman, Sachs & Co., suggested that Household Bank's profitability may be below average because it shares the revenue.
A paper on value-added cards by SMR Research Corp., Budd Lake, N.J., argued that revenue sharing would be more than offset by savings on marketing expenses. (Published accounts have said GM paid for a $70 million national advertising campaign.)
More important for Mr. Zebeck, the program has accomplished its objective by helping sell cars.
SMR estimated that, once GM's card portfolio matures, the company could sell as many as 289,000 cars annually as a result of credit card rebates. What's more, this research concluded that the rebates' cost -- perhaps 2.5% of the revenue on each car sale -- would be recouped in manufacturing efficiencies as production volumes increase.
From GM's standpoint. Mr. Zebeck added, the most important performance statistic is charge volume. That is what determines rebates and, ultimately, auto sales.
The executive said he would be disappointed if the GM card doesn't overtake AT&T in volume as well as outstandings in the next six to 12 months. AT&T's volume was $19 billion last year, compared to $6.5 billion for Household Bank, according to The Nilson Report of Oxnard, Calif.
Predictably, Mr. Zebeck is not content to rest on his laurels at the GM card's first anniversary.
"Our focus is not just to stay the course but to continue to provide the premier product in the automotive category," he said. He promised "different enhancements, travel service, partner activity . . . a lot of stuff."
