Household to Issue Corporate MasterCard with Giant Carlson Wagonlit

Household International, issuer of the General Motors MasterCard, will cobrand a corporate MasterCard with Carlson Wagonlit Travel, one of the world's largest travel agencies.

The exclusive program, targeting multinational corporations, will be launched in North America in the first quarter of 1996, with Europe and Asia to follow.

Prospect, Ill.-based Household, the sixth-largest credit card issuer, with $11 billion in outstandings and 21 million consumer cardholders, said it is the third-largest bank issuer of corporate cards.

Household has parlayed its cobranding relationship with GM into corporate card programs for the giant automaker, Electronic Data Services Corp., and Howard Hughes Corp. Household also issues corporate cards to Ameritech, another cobranding client, Palomer Products, and internally. The portfolio stands at 126,700 cards.

First Bank System Inc. leads bank issuers in the corporate card market, with 575,000 cards issued, as well as 250,000 purchasing cards.

In 1993, First Bank System issued a cobranded Carlson corporate card. That program grew to 3,000 cards, but the relationship between the two companies will be severed at the end of this year.

The Household/Carlson BusinessCard will be marketed through the travel specialist's extensive customer base and retail sales force. Minneapolis- and Paris-based Carlson said it has $12 billion in annual sales and 4,000 retail locations in 125 countries. The two partners have arranged a profit- sharing agreement.

"Household is trying to get a leg up" on the corporate card market, said James L. Accomando, a Fairfield, Conn.-based consultant. He said Carlson's name on the card will differentiate the program from those of other issuers, and that access to Carlson's data base gives it "a ton of opportunity to grow the program."

The companies expect their new offering to compete with American Express Co.'s travel and entertainment charge card, which dominates the market, at 7.1 million cards.

American Express, the largest travel agency in the world, has been able to tie those services into its corporate card offering, said Philip A. Skarston, vice president of marketing and business development for Procard Inc., a Golden, Colo.-based provider of purchasing card services.

Most Visa and MasterCard issuers don't have the resources to provide travel services, but Household's new partner may give it that competitive edge.

Warren Wilcox, executive director of planning for Household's credit card group, said the Carlson card will offer multinational firms an array of travel services and expense management tools.

He called cobranded corporate cards "a completely new arena."

While analysts agreed that corporate cobranded cards are unusual, Mr. Accomando said Wells Fargo & Co. and Star Bank Corp. of Cincinnati offer corporate cards with travel benefits for a fee, in programs similar to American Express' Membership Miles.

Even so, he added, "With Carlson, (Household) has the benefit of name recognition." Mr. Accomando said the bank could use the relationship to compete with American Express. He also said that though most corporate cards are plain vanilla, issuers are beginning to turn to value-added programs to attract corporate customers.

Mr. Skarston agreed. "You'll probably see a trend starting here," he said. "You tend to see successful programs imitated."

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