treatment of First USA was like that of a parent who asks a child prodigy too much too quickly, causing a burnout.

Industry experts said they regarded First USA as a fundamentally sound business forced into the unrealistic role of companywide profit engine. Other companies have been able to confront the difficulties described at First USA -- customer attrition and disgruntlement over high fees and billing policies -- without any similar public airing of turmoil.

"I don't think the problems are deeper than they let on," said Michael Auriemma, president of Auriemma Consulting, a credit card consulting firm in Westbury, N.Y. Rather than pointing to an industrywide problem, First USA's woes "had more to do with high attrition and the inability to maintain the required growth rate."

When Bank One bought First USA in 1997, it was a precocious monoline lender with a seemingly magical ability to draw in cardholders and serve their needs as well as the company's growth mandate. Today, with $70 billion of managed card loans, First USA is virtually tied with Citigroup Inc. as the largest bank credit card issuer. MBNA Corp. is next, at $67 billion.

The problems facing First USA "are challenging us all in the industry," said one top bank card executive. "These issues are inherent in this competitive environment that we're all trying to survive in."

This executive, who spoke on condition his name not be used, said the "wake-up call" about the strategies pursued by First USA -- low teaser rates, barrages of mail solicitations, steep penalty pricing -- have been "out there for a while." He said, "We have to lessen our dependence on the kinds of pricing and strategies that don't add a lot of consumer value."

"I'm not sure they underperformed, but they clearly overpromised," said Philip R. Grennan 3d, a consultant in Portage, Mich., with Business Dynamics Consulting Inc. "Somebody's head had to roll."

People who have known and worked with Richard W. Vague, the co-founder of First USA who resigned Tuesday, say he was a consummate manager whose departure will hurt. He was said to have been a favorite of Bank One chairman John B. McCoy, and some observers were touting Mr. Vague as a potential successor.

"In my opinion, the resignation of Dick Vague is a serious blow to Bank One," said Charles Cawley, chairman of monoline rival MBNA, which, like First USA, is based in Wilmington, Del. "He built First USA and he is one of the finest executives in our industry."

Mr. Vague's day-to-day card management responsibilities are being assumed by William P. Boardman, best known in recent years as the architect of Bank One's acquisition strategy. Mr. Boardman, who negotiated the deal for First USA among others, is chairman of the Visa International board and occupies one of Bank One's two Visa U.S.A. board seats.

A Visa U.S.A. spokesman said the association will "work with Bank One to find a replacement for Dick Vague," who held the bank's other seat.

Observers said First USA has already dropped hints of the path it will take to fix its problems. After years of swamping mailboxes with low-interest-rate solicitations, the group has curtailed its direct mail and raised some interest rates.

Moshe Orenbuch, a credit card industry analyst at Donaldson, Lufkin & Jenrette Inc., said these moves will have a "salutary effect on the competitive environment."

"These teaser-rate products brought in people shopping for credit cards, as opposed to people shopping for merchandise," Mr. Auriemma said.

Mr. Vague, a frequent speaker on the conference circuit, used to boast of his division's $1 billion marketing budget and myriad deals with Internet portal companies. In May, Bank One Corp. opened and put it under Mr. Vague's aegis.

The comarketing deals with America Online, Yahoo, and Lycos that earned plaudits for First USA last spring are now drawing criticism. "They were going out there and buying market share," said Kathleen M. McShane, president of Kendrew Group Ltd. of New Canaan, Conn., a cobranding expert who represented companies that did deals with First USA. In some cases, First USA "paid billions of dollars, and lost sight of the payback."

Ms. McShane and other observers said the marriage of the nimble and entrepreneurial monoline with the more plodding full-service bank required more serious, hands-on oversight than management chose to give. "I just think the vision wasn't there," Ms. McShane said. "There was never any real melding of the organizations, even at the senior level."

Geoffrey Nicholson, vice president at Boston Consulting Group, said the First USA experience does not necessarily call the monoline model into question. But he said companies like Bank One have had to wrestle with how to mix cultures, philosophies, and systems.

Other credit card monolines -- MBNA, Capital One Financial Corp., Providian Financial Corp., and Metris Cos. -- have done better than First USA in recent quarters, despite pricing challenges and competition. Some analysts say First USA is at a relative disadvantage because it is part of a commercial bank, and thus shoulders heavy cross-selling duties.

"I think that MBNA and Capital One are very pleased to be controlling their own destinies at this point," Mr. Orenbuch said. Those companies "are expanding their product sets more slowly and conservatively" than First USA.

"The good thing about monolines is that they are completely focused," Mr. Nicholson said, but they are vulnerable to blips in their core businesses. "Broad-based banks have advantages too, but they haven't used them," he said, adding that the key will be found in breaking down the barriers -- also called silos -- between customer information and profitability analysis systems.

First USA "had huge growth targets, and there was excessive pressure to grow," said Gary Gordon, an analyst at PaineWebber Inc., who said he never "saw synergies between Bank One and First USA."

The head of one major credit card business, who spoke on the condition of anonymity, said, "I don't think Bank One's ownership had anything to do with First USA's problems. "Going forward, they will no longer be a monoline. There will be a lot of oversight by (John) McCoy," to whom Mr. Boardman reports.

David Robertson, president of The Nilson Report, an industry newsletter in Oxnard, Calif., said First USA seemed to be a victim of exuberant expectations. "Consumer credit is growing (but) at very modest levels," he said.

Moreover, First USA got "a lot of bad press (for) the way they implemented risk-based pricing," Mr. Robertson said. People who missed payments by a slim margin often found their annual percentage rates raised to 20% or more.

Randy Christofferson, who had served as a top deputy to Mr. Vague before leaving First USA in May, said in a telephone interview that his former company has "had some stumbles recently" but "being able to bring the asset base, the management experience, and other product lines to bear is a plus" for Bank One and First USA.

"First USA under Bank One's leadership has tripled in size," said Mr. Christofferson, who is now president and chief executive officer of Walker Digital Corp., the intellectual property laboratory in Stamford, Conn., that developed "First USA is clearly one of the leaders in direct marketing and data base technology, and I'm sure that's still true."

Jerry D. Craft, president of Inficorp, a credit card portfolio management company in Atlanta, expressed optimism, saying: "I have a lot of faith in Bank One, and I think they'll get it back on track quickly."

This article was written by Jennifer Kingson Bloom, Lisa Fickenscher, Miriam Kreinin Souccar, and Jeffrey Kutler.

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