Household International Inc. has big plans for the AFL-CIO credit card portfolio it is purchasing from Bank of New York Co. in the coming weeks.

The two companies announced Monday that Household will buy the $3.4 billion portfolio for $575 million, in what will be the second-largest credit card portfolio sale in the last four years.

"I think this is a benchmark transaction for Household," said Joseph W. Saunders, president of Household Credit Services in Salinas, Calif. "It's very consistent with who we are."

The Prospect, Ill.-based financial services company, best known for fueling the rapid growth of the General Motors MasterCard, hopes to inject the AFL-CIO portfolio with a burst of energy.

Mr. Saunders said Household plans to market Union Privilege aggressively. Only 2.2 million cards out of a membership base of 13 million have been issued.

The pricing of Union Privilege will remain the same: a variable 13.25% rate with no annual fee. However, Household plans to offer new products and take over the secured version of Union Privilege, offered by Amalgamated Bank, New York.

With the acquisition, Household will become the sixth-largest MasterCard and Visa issuer.

The largest card-portfolio sale in recent years was completed in May, when Norwest Corp., Minneapolis, signed a deal to sell $670 million in card receivables to Associates National Bank, a subsidiary of Associates First Capital Corp.

Although Bank of New York's credit card portfolio will be about 40% smaller, analysts say the New York bank will have fared well in the deal.

Bank of New York said it will use part of the $575 million it is to receive from Household to buy back 10 million common shares.

"The sale of the Union Privilege Card does not affect, in any way, our plans to grow our remaining portfolio," J. Carter Bacot, chairman and chief executive of Bank of New York Co., said in a press release. "We are actively exploring other growth opportunities."

With half its card activity leaving the bank, questions remain about Bank of New York's plans for its Union Privilege staff in Delaware.

"We are looking at ways to move other operations to Delaware," said a spokesman for the bank, who declined to provide further details.

Credit card consultant Donald M. Berman, of Cardholder Management Services, Plainview, N.Y., speculated that unless Bank of New York is preparing to launch another large card program, layoffs seem likely.

Last year, with about one year left in its 10-year contract with Bank of New York, the AFL-CIO made it known that it wanted a more profitable arrangement with a card issuer.

A number of banks, including First Union Corp., offered proposals. In February, the AFL-CIO said it had chosen Household's offer, which includes a $35 million strike loan program.

For its part, the AFL-CIO expects to strengthen its coffers and lobbying power during its planned 12-year contract with Household.

"The renegotiated royalties to the AFL-CIO help all working families by providing funds for new organizing to build a stronger labor movement," said John J. Sweeney, president of the labor group.

Household's Mr. Saunders said the deal does not imply support for the AFL-CIO's political goals.

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